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Garland Independent School District Garland, Texas

Comprehensive Annual

Financial Report

Fiscal Year Ended August 31, 2016

GARLAND INDEPENDENT SCHOOL DISTRICT

GARLAND, TEXAS

COMPREHENSIVE ANNUAL FINANCIAL REPORT

FISCAL YEAR ENDED

AUGUST 31, 2016

Prepared by:

The Department of

Business Operations


ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED AUGUST 31, 2016

TABLE OF CONTENTS

Exhibit Page

INTRODUCTORY SECTION (Unaudited)

Certificate of the Board i

Board of Trustees and Administrative Officials ii

Plan of Organization iii

Transmittal Letter iv

GFOA Certificate of Achievement x

ASBO Certificate of Excellence xi

FINANCIAL SECTION

Independent Auditor's Report 1

Management's Discussion and Analysis (Unaudited) 4

BASIC FINANCIAL STATEMENTS

Government Wide Statements:

A-1 Statement of Net Position 12

B-1 Statement of Activities 13

Governmental Fund Financial Statements:

C-1 Balance Sheet - Governmental Funds 15

C-1R Reconciliation of the Governmental Funds Balance Sheet 17

to the Statement of Net Position

C-2 Statement of Revenues, Expenditures, and Changes in Fund Balance 18

C-3 Reconciliation of the Governmental Funds Statement of Revenues, 20

Expenditures, and Changes in Fund Balance to the Statement of Activities

Proprietary Fund Financial Statements:

D-1 Statement of Net Position 21

D-2 Statement of Revenues, Expenses, and Changes in Fund Net Position 22

D-3 Statement of Cash Flows 23

Fiduciary Fund Financial Statements:

E-1 Statement of Fiduciary Assets and Liabilities 24

Notes to the Basic Financial Statements 25

REQUIRED SUPPLEMENTARY INFORMATION

G-1 Schedule of Revenues, Expenditures, and Changes in 54

Fund Balance - Budget and Actual - General Fund

G-2 Schedule of Revenues, Expenditures, and Changes in 55

Fund Balance - Budget and Actual - National Breakfast and Lunch Program

Note to Required Supplemental Information 56

G-3 Schedule of The District's Proportionate Share of The Net Pension Liability 58

Teacher Retirement System of Texas

G-4 Schedule of The District's Contributions- Last 10 Fiscal Years 58

Teacher Retirement System of Texas




TABLE OF CONTENTS - CONTINUED

Exhibit Page

COMBINING STATEMENTS

Internal Service Funds: 60

H-1 Combining Statement of Net Position 61

H-2 Combining Statement of Revenues, Expenses, and Changes 63

in Fund Net Position

H-3 Combining Statement of Cash Flows 65

Agency Funds: 67

H-4 Combining Statement of Changes in Assets and Liabilities 68

REQUIRED TEA SCHEDULES SECTION

J-1 Schedule of Delinquent Taxes Receivable 69

J-2 Schedule of Revenues, Expenditures, and Changes in Fund Balance 71

Budget and Actual - Debt Service Fund

STATISTICAL SECTION (UNAUDITED):

Table of Contents - Statistical Section 72

S-1 Net Position by Component 73

S-2 Expenses, Program Revenues, and Net (Expense) Revenue 75

S-3 General Revenues and Total Change in Net Position 77

S-4 Fund Balances, Governmental Funds 79

S-5 Governmental Funds Revenues 81

S-6 Governmental Funds Expenditures and Debt Service Ratio 83

S-7 Other Financing Sources and Uses and Net Change in Fund Balances 85

S-8 Appraised Value and Actual Value of Taxable Property 87

S-9 Direct and Overlapping Property Tax Rates 88

S-10 Principal Property Taxpayers 89

S-11 Property Tax Levies and Collections 90

S-12 Outstanding Debt by Type 91

S-13 Direct and Overlapping Governmental Activities Debt 92

S-14 Legal Debt Margin Information 93

S-15 Demographic and Economic Statistics 94

S-16 Principal Employers 95

S-17 Full Time Equivalent District Employees by Type 96

S-18 Operating Statistics 98

S-19 Operating Indicators 99

S-20 School Building Information 100




TABLE OF CONTENTS - CONTINUED

Exhibit Page

FEDERAL AWARDS SECTION

Report on Internal Control over Financial Reporting and on 101

Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance with Government Auditing Standards

Independent Auditor's Report on Compliance with Requirements that Could 103

Have a Direct and Material Effect on Each Major Program and on Internal

Control over Compliance in Accordance with Uniform Guidance

K-1 Schedule of Expenditures of Federal Awards 105

Notes to Schedule of Expenditures of Federal Awards 106

Schedule of Findings and Questioned Costs 107

This page intentionally left blank

Introductory Section

Length of Term

Name Position Place Service Expires

Larry Glick Secretary 1 9 years May 2019 Tax Attorney

Johnny Beach Assistant Secretary 2 7 months May 2019 Retired Educator

Linda Griffin President 3 18 years May 2019 Consultant

Jed N. Reed Vice President 4 7 months May 2017 Retired Educator/Administrator

Scott Luna Member 5 11 years May 2017 Attorney

Robert Selders, Jr. Member 6 1 year May 2018 Business Owner

Rick Lambert Member 7 4 years May 2018 Attorney

Occupation

BOARD OF TRUSTEES

Length of

Name Position Service

* Dr. Deborah Cron Interim Superintendent 0 years

** Dr. Bob Morrison Superintendent 3 years

Dr. Linda Chance Chief Officer of Human Resources 3 years

Dr. Rene Barajas Chief Financial Officer 8 years

Dr. Jovan Wells Associate Superintendent of Curriculum, Instruction & Assessment 3 years

Dr. Wendy Eldredge Assistant Superintendent of Student Services and Community Relations 15 years

* Hired on December 27, 2016

** Retired on December 20, 2016

ADMINISTRATIVE OFFICIALS

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iii

Whitley Penn, L.L.P., a firm of independent auditors, has audited the financial statements of the District. The goal

of the independent audit is to provide reasonable assurance that the financial statements of the District for the fiscal

year ended August 31, 2016, are free of material misstatement. The independent audit involves examining, on a test

basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting

principles used and significant estimates made by management, and evaluating the overall financial statement

presentation. Based upon the audit, the independent auditors concluded there was a reasonable basis for rendering

an unmodified opinion that the District’s financial statements for the fiscal year ended August 31, 2016, are fairly

presented in conformity with GAAP. The independent auditor’s report is presented as the first component of the

financial section of this report.

The District is including all information required by the TEA as set forth in the Financial Accountability System

Resource Guide. In order to comply with state-mandated audit requirements, data control codes are shown on all of

the financial statements. The District is required to undergo an annual single audit in conformity with the provisions

of the Single Audit Act Amendments of 1996 and U.S. Office of Management and Budget circular A-133, Audits of

States, Local Governments, and Non-Profit Organizations. Information related to this single audit, including the

schedule of expenditures of federal awards, findings and recommendations, and independent auditor’s reports on the

internal control and compliance with applicable laws and regulations is included in this report and sent to the TEA.

GAAP requires management to provide a narrative introduction, overview, and analysis to accompany the basic

financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is

designed to complement MD&A and should be read in conjunction with it. The District’s MD&A can be found

immediately following the report of the independent auditors.

PROFILE OF THE DISTRICT

The District was created in 1949 and is the fourteenth largest school district in Texas. Residents of the District elect

a seven-member Board of Trustees (the Board), each of whom serves for three years. Semi-monthly meetings of the

Board are posted and advertised as prescribed under state law so the Board may fulfill its charge to the students,

parents, staff, and taxpayers of the District. Special meetings or work sessions are scheduled as needed. The Board

has final control over all school matters except as limited by state law.

Serving the communities of Garland, Rowlett, and Sachse, the District’s boundaries encompass approximately 93

square miles in Dallas County. The District provides a well-rounded program of public education for children from

pre-kindergarten through grade twelve. In addition to basic instructional programs, the District offers special

education, gifted and talented, bilingual/ESL, remedial, college preparatory, and career and technical programs. The

District is fully accredited by the TEA.

The District has seven traditional high schools serving students in grades nine through twelve. The District has a

nontraditional high school program serving students in grades nine through twelve. The District has twelve middle

schools, forty-seven elementary schools, two Pre-K centers, and three special learning centers.

v

The table below shows the demographic composition of the District during the 2005-06 and 2015-16 school years.

2005-06 2015-16

Enrollment 56,955 57,418

White 34.6% 20.3%

Hispanic 38.6% 49.8%

African-American 19.0% 17.6%

Asian 7.3% 4.0%

Native American 0.5%

American Indian or Alaska Native 0.4%

Native Hawaiian/Other Pacific Islander 0.1%

Two or More 2.1%

Economically Disadvantaged 45.3% 65.6%

Limited English 23.1% 26.3%

Graduates 3,088 3,938

The District’s total student population has remained stable in recent years and is expected to remain relatively

unchanged in 2016-17. However, the makeup of the student population continues to change. This change can

require adjustments in the instructional programs. Educational research suggests economically disadvantaged

students come to school with learning styles that need to be addressed through early childhood programs,

accelerated instruction, and extended learning time. The District is expanding existing programs to meet these needs

and studying the most effective methods to enhance learning for these children.

A challenge facing many Texas school districts is the growing number of students who do not speak English. While

the majority of non-English speakers are Hispanic, the District serves students speaking more than 50 different

languages. The District is continuing to expand and improve the bilingual and English-as-a-Second Language

instructional programs. The growth, particularly in these two areas, is an ongoing challenge for the Garland

Independent School District.

A high degree of professionalism exists among the District’s employees and an on-going recognition of student and

staff excellence contributes to this environment. The instructional program is geared toward having the students

meet or exceed grade-level expectations. Emphasis is placed on higher-level thinking skills, including research

methodologies and independent, complex, and critical thinking skills.

The District attracts highly qualified personnel because of its commitment to excellence. The following table shows

the employee composition of the District during the 2005-2006 and 2015-16 school years.

2005-06 2015-16

Total Staff 6,853 7,293

Teachers 3,692 3,664

Masters or Doctorate 24.8% 30.1%

Average Years of Experience 10.3 11.2

Student/Teacher Ratio 15.4 15.7

vi

The District maintains budgetary controls throughout all of its financial systems. The objective of budgetary

controls is to ensure compliance with legal provisions embodied in the official budget adopted by the Board. The

Board adopts an official budget for the general fund, debt service fund, and student nutrition services fund (which is

included in the special revenue fund). In accordance with procedures prescribed by the Texas Education Code,

budget amendments that affect the total amount in a fund or functional spending category must be approved by the

Board prior to the expenditure of funds. The functional level is specified by Board policy as the legal level of

budgetary control.

FINANCIAL CONDITION AND LONG RANGE PLANNING

The information presented in the financial statements is perhaps best understood when it is considered within the

broader perspective of the specific environment in which the District operates.

Local Economy - The District is located approximately fourteen miles northeast of downtown Dallas. The

economic condition of the area within the District’s boundaries has improved slightly from the prior year. The table

below compares property values for the District.

2014-15 2015-16 2016-17

Certified Market Value $16,467,791,270 $17,656,334,400 $19,885,607,620

Average Market Value of Residence $132,829 $138,330 $158,284

There are signs of continued development in the District. The Bank of America building on Avenue B near

Glenbrook is being converted into apartments. Jiffy Lube has opened near the intersection of Shiloh and Campbell

Roads. Ricky Rockets Fuel Center is planned on former undeveloped Raytheon property at the northeast corner of

Jupiter and Miller Roads. A 262 unit apartment complex has been approved north of Marketplace Drive and west of

Saturn Road near Saturn Road and LBJ Freeway. My Choice Homes has started developing sixteen single family

lots north of Buckingham Road on Shiloh Road. RagingWire Data Centers is building a 1,000,000 square foot 80

megawatt data center on 42 acres near Lookout Drive and the President George Bush Turnpike. Campfire Crossing

consisting of 383 apartment units and sixteen townhomes is under construction near the intersection of President

George Bush Turnpike and Campbell Road. Old Chicago Pizza & Taproom is complete and open for business near

Winco Foods at Centerville Road and LBJ Freeway. Tru by Hilton, an eighty-seven room hotel, is under

construction between the Hyatt Place and the District’s Gilbreath-Reed Career Technology Education Center, which

is also under construction. Parc at Garland, an apartment complex at Waterhouse Boulevard and Bobtown Road is

currently under construction. Firewheel Senior Living is nearing completion at Campbell Road and Lookout Drive.

Shoal Creek Urology is under construction at Naaman Forest Boulevard and Black Swan Circle. Hollywood Feed, a

holistic pet store, has gone into the old Wolf Camera location on Highway 78 at the Firewheel Town Center. Panda

Express is complete and open for business between Sprouts and First Choice Emergency near the intersection of

Rowlett Road and Lakeview Parkway. Valentino’s Italian Restaurant has moved from a space in a strip center near

McAlisters on Lakeview Parkway to the former Krispy Kreme location on Lakeview Parkway. The builder has

started clearing land for Manors on Miller a development of thirty-nine single family homes on Miller Road east of

Dexham Road.

Bond Election and Issuance – Garland ISD Voters approved a $455.5 million bond package on November 4, 2014

to fund significant investments to address the following:

Secured entrances

Access control systems for building entrances, security cameras, and fire alarm equipment

Americans with Disabilities Act door hardware and secure classroom door locks

Americans with Disabilities Act restrooms

Mechanical, electrical, plumbing, and fire sprinkler improvements

Window replacements

Lights at ball fields

Restroom and concession stands at ball fields

Fine Arts expansion of band, choir, and orchestra rooms

Career and Technical Education Center

Natatorium

Classroom computer replacement

One-to-one student devices in secondary schools

vii

The above amounts and proposed uses are preliminary and subject to change. Actual use of bond funds will be

determined by the Board of Trustees. The District has a reimbursement resolution in place so that general fund

monies can be used on bond projects and be paid back upon bond issuance. This will enable the District to delay

borrowing as long as possible. In June 2015 the District issued Series 2015A, Unlimited Tax School Building and

Refunding Bonds, and Series 2015B, Unlimited Tax School Building Bonds, utilizing $196,055,000 of the

November 2014 voted authorization. In October 2016 the District issued $150,250,000 Unlimited Tax School

Building Bonds, Series 2016, utilizing $170,000,000 of the November 2014 voted authorization. The remaining

voted authorization is $89,445,000 and is expected to be issued over the next 3 years depending on cash flow

requirements of the bond projects.

Management continues to evaluate the renovation and new facility needs of the District. The table below provides

the average age of District campuses by type based on the year the campus opened.

Number Average Age

Pre-Kindergarten Centers 2 10 years

Elementary Schools 47 39 years

Middle Schools 12 42 years

High Schools 7 39 years

State Funding - During the 84th regular session of the Texas Legislature in the spring of 2015, the State increased

funding for education by $3.56 billion for the next two years. The District’s funding from the State increased

approximately $12,900,000 for 2015-16 and is expected to increase $8,500,000 for 2016-17, compared to funding

received under the funding formulas passed in the 2013 legislative session. The funding increases are due primarily

to the following changes to the State’s funding formulas for public education in House Bill (HB) 1. Senate Bill (SB)

1 increased the homestead exemption from $15,000 to $25,000, contingent upon voter approval in November 2015.

Voters approved the increase in the homestead exemption, which went into effect for 2015-2016. SB1 included

provisions to hold districts harmless for General Fund revenue. There are some limitations on the hold harmless

protection for Debt Service Fund revenue.

2014-2015 2015-2016 2016-2017

Basic Allotment $5,040 $5,140 $5,140

Regular Program Adjustment Factor 1.00 1.00 1.00

Target Reduction 0.9263 0.9263 0.9263

Austin Yield $61.86 $74.28 $77.53

Tier I Equalized Wealth Level $504,000 $514,000 $514,000

The 85th regular session of the Texas Legislature convenes January 10, 2017 and adjourns May 29, 2017.

Fund Balance – The unassigned fund balance in the general fund is 36.2% of general fund expenditures. This

represents 4.3 months of operations in the general fund.

The District has been aware of the possibility of fluctuations in state funding for several years and has taken steps to

control expenditures and increase operational efficiencies. Accordingly, the fund balance in the general fund has

increased for 8 consecutive years. The increased fund balance will enable the District to compensate for fluctuations

in state funding and meet the challenge of future needs.

MAJOR INITIATIVES AND ACCOMPLISHMENTS

The District completed the first phase of the 1:1 iPad deployment, delivering 17,700 iPads to high school students in

the fall of 2016. The final stage is the deployment of iPads to middle school students during the 2017-2018 school

year.

As part of the process to issue the 2016 bonds, referred to above, the District sought bond ratings from Moody’s

Investor Services and Fitch Ratings. Moody’s affirmed their AAA rating of the District. Fitch affirmed their rating

of AA+ assigned to the District.

TEA is in the process of implementing revisions to the Financial Accountability Rating System of Texas (FIRST).

The rating system was established during the 76th Texas Legislature. The 2014-2015 and 2015-2016 ratings are

transitions years. The only two ratings a district could receive in 2014-2015 are Pass and Substandard Achievement.

The District received a rating of Pass for 2014-2015. For 2015-2016 the districts could earn scores of A through F,

with A being Superior and F being Substandard Achievement. The District earned a score of A (Superior) for 2015-

2016. In 2016-2017 TEA will use the same indicators as 2015-2016, but it will require a higher score to achieve a

rating of A (Superior).

viii

The Certificate of Excellence in Financial Reporting Award

is presented to

Garland Independent School District

for its Comprehensive Annual Financial Report (CAFR)

for the Fiscal Year Ended August 30, 2015.

The CAFR has been reviewed and met or exceeded

ASBO International’s Certificate of Excellence standards.

Brenda R. Burkett, CPA, CSBA, SFO John D. Musso, CAE, RSBA

President Executive Director

xi

Financial Section

Austin Dallas Fort Worth Houston

Dallas Office8343 Douglas AvenueSuite 400Dallas, Texas 75225214.393.9300 Main

whitleypenn.com

1

INDEPENDENT AUDITORS’ REPORT To the Board of Trustees Garland Independent School District Garland, Texas Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Garland Independent School District (the “District”) as of and for the year ended August 31, 2016, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

To the Board of Trustees Garland Independent School District

2

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the District, as of August 31, 2016, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 through 11, the budgetary comparison information on pages 54 through 57, and the GASB required supplementary pension schedules on page 58, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The combining and individual non-major fund financial statements, and required Texas Education Agency (“TEA”) schedules, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. The combining and individual non-major fund financial statements, and required TEA schedules, as listed in the table of contents, and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual non-major fund financial statements, required TEA schedules, and the schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.


3

The introductory section and statistical sections, as listed in the table of contents, have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 18, 2017, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance.

Dallas, Texas January 18, 2017


Management’s Discussion and Analysis

Year Ended August 31, 2016

As management of the District, we offer readers of the District’s financial statements this narrative overview and

analysis of the financial activities of the District for the fiscal year ended August 31, 2016.

FINANCIAL HIGHLIGHTS

The assets and deferred outflows of the District’s governmental activities exceeded its liabilities and

deferred inflows at the close of the most recent fiscal year by $300,762,035 (net position). Of this amount

$90,509,434 may be used to meet the District’s ongoing obligations (unrestricted net position).

As of the close of the current fiscal year, the District’s governmental funds reported combined ending fund

balances of $318,056,582, which breaks down as follows.

Non-Spendable 5,733,903$ 1.8%

Restricted 118,698,552 37.4%

Committed 10,330,898 3.2%

Assigned 21,289,184 6.7%

Unassigned 162,004,045 50.9%

Total 318,056,582$ 100.0%

OVERVIEW OF THE FINANCIAL STATEMENTS

Both the discussion and analysis presented are intended to serve as an introduction to the District’s basic financial

statements. The District’s basic financial statements comprise three components: government-wide financial

statements, fund financial statements, and notes to the financial statements. This report contains other

supplementary information in addition to the basic financial statements.

Government-wide financial statements. The government-wide financial statements are designed to provide

readers with a broad overview of the District’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the District’s assets, liabilities, and deferred outflows

and inflows of resources. Net position is equal to assets plus deferred outflows of resources less liabilities and

deferred inflows of resources. Over time, increases or decreases in net position may serve as a useful indicator of

whether the financial position of the District is improving or deteriorating.

The statement of activities presents information for all current year revenues and expenses regardless of when

revenue is received or expenses incurred. Therefore, some revenues and expenses reported in this statement will

result in cash flows in future fiscal periods.

Both of the District’s government-wide financial statements distinguish the functions of the District as being

principally supported by taxes and intergovernmental revenues (governmental activities) or business-type activities

intended to recover all or a significant portion of their costs through user fees and charges. The District has only one

business-type activity: the Concession Fund. In August 2015, the District entered into a contract with Ed Campbell

Company to operate the concession stands at District Stadiums. The District’s enterprise fund ceased regular

operations in August 2015 and completed all entries to close out the fund in August 2016.

Component units are legally separate organizations for which the Board of Trustees of the District is legally

accountable. They can also be other organizations for which the nature and significance of their relationship with

the District is such that exclusion would cause the District’s financial statements to be incomplete. The District has

no component units for which it is financially accountable. The government-wide financial statements can be found

on pages 12-14 of this report.

4

Fund financial statements. A fund is a grouping of related accounts used to maintain control over resources

segregated for specific activities or objectives. The District, like other state and local governments, uses fund

accounting to demonstrate compliance with finance-related requirements. The fund financial statements provide

more detailed information about the District’s most significant funds, not the District as a whole. Some funds are

required by State law and/or bond covenants. Other funds may be established by the Board to control and manage

money for particular purposes or to show it is properly using certain taxes or grants.

All of the funds of the District can be divided into three categories: governmental funds, proprietary funds, and

fiduciary funds.

Governmental funds. Governmental funds are used to account for essentially the same functions reported

as governmental activities in the government-wide financial statements. However, unlike the government-

wide financial statements, governmental fund financial statements focus on near-term inflows and outflows

of spendable resources as well as on balances of spendable resources available at the end of the fiscal year.

Such information may be useful in evaluating a government’s near-term financing requirements. Because

the focus of governmental funds is narrower than that of the government-wide financial statements, it is

useful to compare the information presented for governmental funds with similar information presented for

governmental activities in the government-wide financial statements. By doing so, readers may better

understand the long-term impact of the government’s near-term financing decisions. Both the

governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and

changes in fund balance provide a reconciliation to facilitate this comparison between governmental funds

and governmental activities. The District maintains four governmental funds all of which are considered to

be major funds. Information is presented separately in the governmental fund balance sheet and in the

governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund,

debt service fund, capital projects fund, and special revenue fund. Per the Texas Education Agency, the

District adopts an annual appropriated budget for its general fund, debt service fund, and student nutrition

services fund. A budgetary comparison schedule has been provided to demonstrate compliance with these

budgets. The basic governmental fund financial statements can be found on pages 15-20 of this report.

Proprietary funds. Proprietary funds provide the same type of information as the government-wide

financial statements, only in more detail. There are two proprietary fund types: enterprise and internal

Service. Enterprise funds are used to report the same functions presented as business-type activities in

government-wide financial statements. The District uses an enterprise fund to account for its concessions

operations, which were outsourced in August 2015. Accordingly, the District’s Enterprise Fund ceased

normal operations at that time. The second type of proprietary fund is the internal service fund. Internal

service funds are an accounting device used to accumulate and allocate costs internally among the various

functions. The District uses the internal service fund to report activities for its catering services, risk

management, Curtis Culwell Center, print shop, motor pool, and copier pool programs. The basic

proprietary fund financial statements can be found on pages 21-23 of this report.

Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside

the District. Fiduciary funds are not reflected in the government-wide financial statements because the

resources of those funds are not available to support the District’s own programs. The District is the

trustee, or fiduciary, for these funds and is responsible for ensuring the assets reported in these funds are

used for their intended purposes. All of the District’s fiduciary activities are reported in a separate

statement of fiduciary assets and liabilities that can be found on page 24. These activities are excluded

from the District’s government-wide financial statements because the District cannot use these assets to

finance its operations.

Notes to the financial statements. The notes provide additional information essential to a complete understanding

of the data provided in the government-wide and fund financial statements. The notes to the financial statements

can be found on pages 25-53 of this report.

5

Other information. In addition to the basic financial statements and accompanying notes, this report also presents

certain required supplementary information that further explains and supports the information in the financial

statements. Required supplementary information can be found on pages 54-59 of this report.

Combining statements are prepared in connection with internal service funds and are presented immediately

following the required supplementary information on pages 60-66 of this report.

Government-wide Financial Analysis

As previously noted, net position may serve as a useful indicator of a government’s financial position. As of August

31, 2016, assets and deferred outflow of resources exceeded liabilities and deferred inflows by $300,762,035.

The District’s Net Position

2016 2015 2016 2015 2016 2015

Current and other assets 404,125,733$ 451,256,941$ -$ (6,661)$ 404,125,733$ 451,250,280$

Capital assets 533,828,201 490,089,948 6,445 533,828,201 490,096,393

Total assets 937,953,934 941,346,889 - (216) 937,953,934 941,346,673

Total deferred outflows 76,447,874 32,985,928 - 76,447,874 32,985,928

Noncurrent liabilities 631,272,132 609,344,088 631,272,132 609,344,088

Other liabilities 73,573,361 52,764,054 - - 73,573,361 52,764,054

Total liabilities 704,845,493 662,108,142 - - 704,845,493 662,108,142

Total deferred inflows 8,794,280 17,597,867 - 8,794,280 17,597,867

Net investment in

capital assets 186,102,148 173,975,555 6,445 186,102,148 173,982,000

Restricted 24,150,453 16,237,116 - 24,150,453 16,237,116

Unrestricted 90,509,434 104,414,137 - (6,661) 90,509,434 104,407,476 Total net position 300,762,035$ 294,626,808$ -$ (216)$ 300,762,035$ 294,626,592$

Governmental Business-type

Activities Activities Total

Governmental activities. Investment in capital assets (e.g., land, buildings, furniture, and equipment) less any

related outstanding debt used to acquire those assets is $186,102,148. The District uses these capital assets to

provide services to students; consequently, these assets are not available for future spending. Although the District’s

investment in capital assets is reported net of related debt, it should be noted the resources needed to repay this debt

must be provided from other sources since the capital assets cannot themselves be used to liquidate these liabilities.

An additional portion (approximately 8%) of the District’s net position represents resources that are subject to

external restrictions on how they may be used. The unrestricted net position ($90,509,434) may be used to meet the

District’s ongoing obligations to citizens and creditors.

6

Changes in the District’s Net Position

2016 2015 2016 2015 2016 2015

Revenues:

Program revenues

Charges for services 13,390,838$ 14,168,661$ -$ 271,241$ 13,390,838$ 14,439,902$

Operating grants and contributions 114,478,252 98,476,190 114,478,252 98,476,190

General revenues

Property taxes 191,303,632 172,668,135 191,303,632 172,668,135

State grants 290,555,354 278,214,031 290,555,354 278,214,031

Other 3,684,045 2,108,890 - 475 3,684,045 2,109,365

Total revenues 613,412,121 565,635,907 - 271,716 613,412,121 565,907,623

Expenses

Instructional and

instructional related services 349,960,122 325,144,009 349,960,122 325,144,009

Instructional and school leadership 40,834,556 38,835,576 40,834,556 38,835,576

Support services - student 88,117,258 85,021,356 88,117,258 85,021,356

Administrative support services 15,353,186 15,338,293 15,353,186 15,338,293

Support services – non-student 87,890,336 68,274,204 87,890,336 68,274,204

Community services 4,063,974 3,462,272 4,063,974 3,462,272

Debt service 18,518,033 15,058,017 18,518,033 15,058,017

Facilities repairs and maintenance 1,984,797 1,605,080 1,984,797 1,605,080

Payments to fiscal agent of

shared services arrangement 78,603 81,790 78,603 81,790

Payments to JJAEP 30,168 10,716 30,168 10,716

Intergovernmental charges 692,137 667,640 692,137 667,640

Concessions - - 213 282,724 213 282,724

Total expenses 607,523,170 553,498,953 213 282,724 607,523,383 553,781,677

Excess of revenues over expenses 5,888,951 12,136,954 (213) (11,008) 5,888,738 12,125,946

Transfers (429) (132,561) 429 132,561 -

Special item - gain on disposal of assets 246,705 265,904 - - 246,705 265,904

Increase/(Decreases) in net position 6,135,227 12,270,297 216 121,553 6,135,443 12,391,850

Beginning net position 294,626,808 347,535,536 (216) (121,769) 294,626,592 347,413,767

Prior period adjustment - (65,179,025) - - - (65,179,025)

Ending net position 300,762,035$ 294,626,808$ -$ (216)$ 300,762,035$ 294,626,592$



Governmental activities. Governmental activities increased the District’s net position by $6,135,227. This increase

is due to an increase in state program revenue. The total cost of all governmental activities this year was

$607,523,170. The amount our taxpayers paid for these activities through property taxes was $191,303,632 or 31%.

Business-type Activities. Business-type activities increased the District’s net position by $216. The increase is due

to a transfer from governmental activities to close out the fund. The District’s business-type activities consist

entirely of transactions related to ceasing concession operations. The District out sourced concession operations in

August 2015.

Financial Analysis of the District’s Funds

As previously noted, the District uses fund accounting to ensure and demonstrate compliance with finance-related

legal requirements, bond covenants, and segregation for particular purposes.

Governmental funds. The focus of the District’s governmental funds is to provide information on near-term

inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s

financing requirements. In particular, unassigned fund balance may serve as a useful measure of the District’s net

resources available for spending at the end of a fiscal year.

7

As of the end of the current fiscal year, the District’s governmental funds reported combined ending fund balances

of $318,056,582 a decrease of $67,438,161 from last year.

Non-Spendable - Inventories 3,034,529$ 1.0%

Non-Spendable - Prepaid Items 2,699,374 0.9%

Restricted - Grant Funds 12,437,623 3.9%

Restricted - Capital Acquisitions and Contractual Obligations 97,915,261 30.8%

Restricted - Retirement of Long-term Debt 8,345,668 2.6%

Committed - Self-Insurance 8,000,000 2.5%

Committed - Local Special Revenue Funds 2,330,898 0.7%

Assigned - Construction and Capital Expenditures 21,289,184 6.7%

Unassigned 162,004,045 50.9%

318,056,582$ 100.0%

The general fund is the primary operating fund of the District. At the end of the current fiscal year, the general

fund’s unassigned fund balance was $162,004,045. As a measure of the general fund’s liquidity, it may be useful to

compare both unassigned fund balance and total fund balance to the total general fund expenditures. Unassigned

fund balance represents 36% of the total general fund expenditures, while total fund balance represents 38% of that

same amount.

The general fund’s fund balance increased $11,615,887 during the current fiscal year. This is due to an increase in

property tax revenue, as a result of increased property values, and an increase in state funding offset by an increase

in expenditures.

The debt service fund has a total fund balance of $8,345,668 all of which is restricted for the payment of debt

service. The net decrease in debt services fund balance was $1,615,487. This decrease was due to an increase in

debt service requirements resulting from the issuance of Bond Series 2015A and 2015B.

The capital projects fund decreased its fund balance by $86,874,292. This decrease is due to current year

expenditures for the construction and renovation of school facilities associated with the November 2014 bond

authorization.

The special revenue fund increased its fund balance by $9,435,731. This increase is due to revenues exceeding

expenditures in the National School Lunch and Breakfast Program and the State Textbook Fund. The State

Textbook Fund is funded by the State of Texas at the beginning of each year and subsequently drawn down.

Proprietary funds. As previously noted, the District’s proprietary fund statements provide the same type of

information found in the government-wide financial statements but in more detail.

Net position of the District’s internal service funds at August 31, 2016, amounted to $7,399,105, a decrease of

$349,010. This is due in part to a decrease in net position of $149,116 in the Copier Pool. The decrease was due to

the termination of the capital lease for copiers. There was a $500,161 increase in net position in the Risk

Management Fund caused by better than expected workers compensation claims experience. There was a $623,086

decrease in net position in the Curtis Culwell Center related to increased expenses. The remaining difference was

the result of small increases and decreases in the other internal service funds.

Factors concerning the finances of the Concession Fund have already been addressed in the discussion of the

District’s business-type activities.

8

Budgetary Highlights

Over the course of the year, the District recommended and the Board approved, several revisions to budgeted

revenue and appropriations. These amendments fall into the following categories:

Amendments approved shortly after the beginning of the new fiscal year for amounts reserved and

designated in the prior year

Amendments approved shortly after the beginning of the new fiscal year to align the payroll budget with

job assignment changes

Amendments in summer to revise estimates for local and state revenue based on the latest information on

student attendance numbers and tax collections

Amendments throughout the year for transfers to and from other funds and federal indirect cost calculations

Amendments during the year for changes in programs

Differences between the original and final amended budget can be briefly summarized as follows:

GENERAL FUND

Revenues

$4,204,649 decrease in local revenues to align budget with estimated year end totals and also as a result of

the increase to the homestead exemption from $15,000 to $25,000 as approved by voters in the November

2015 election.

$5,914,479 increase in state program revenues to align budget with estimated year end totals and also as a

result of the increase to the homestead exemption from $15,000 to $25,000 as approved by voters in the

November 2015 election.

$4,681,833 increase in Federal Medicaid program revenues to align budget with estimated year end totals.

Expenditures and Transfers Out

$1,074,936 increase in instruction expenditures to align budget with estimated year end totals.

$878,061 increase in guidance, counseling and evaluation expenditures to align budget with year-end totals.

$370,528 decrease in student transportation expenditures to align budget with estimated year end totals.

$532,408 increase in extracurricular activities expenditures to align budget with year-end totals.

$900,603 decrease in general administration expenditures to align budget with estimated year end totals.

$1,121,383 decrease in plant maintenance and operations to align budget with estimated year end totals.

After appropriations were amended as described above, actual revenues were $7,431,434 greater than final

budgeted amounts due to more revenue in local, state and federal programs than final budgeted estimates.

Actual expenditures were $6,771,943 less than final budget amounts due to year end payroll accrual and non-

payroll expenses being less than estimated. Year-end revenues were greater than expenditures, thus adding to

existing fund balance.

For the year ended August 31, 2016, expenditures exceeded appropriations in the following fund and function

(the aggregate level of control). Those over expenditures were funded by less than anticipated expenditures in

other functions or fund balance in the appropriate fund.

General Fund

Excess of

Expenditures over

Appropriations

Instruction 2,244,274$

2,244,274$

9

NATIONAL BREAKFAST AND LUNCH PROGRAM

Revenues

$771,228 increase in federal revenue sources to align revenue budget with estimated year end totals.

After appropriations were amended as described above, actual revenues were $203,164 less than final budgeted

amounts due to less revenue in local and intermediate sources than final budgeted estimates. Actual expenditures

were $1,165,454 less than final budget amounts due to the year-end payroll accrual being less than estimated at the

time the final amended budget was submitted to the Board of Trustees for approval. Year-end expenditures were

less than revenue, thus increasing existing fund balance.

Capital Asset and Debt Administration

Capital assets. The District’s investment in capital assets (net of accumulated depreciation) for governmental

activities was $533,828,201 and $490,089,948 as of August 31, 2016 and 2015, respectively. This investment in

capital assets includes land, buildings and improvements, and furniture and equipment. The District’s investment in

capital assets (net of accumulated depreciation) for business-type activities was $0 and $6,445 as of August 31, 2016

and 2015, respectively. This investment in capital assets is made up entirely of furniture and equipment.

District’s Capital Assets (net of depreciation)

2016 2015

Governmental Activities

Land $ 14,077,107 $ 14,077,107

Land improvements, net 21,158,447 12,679,799

Buildings and improvements, net 398,173,141 409,611,864

Furniture and equipment, net 33,614,285 34,772,834

Construction in progress 66,805,221 18,948,344

Total at historical cost $ 533,828,201 $ 490,089,948

Business Type Activities

Furniture and equipment, net $ - $ 6,445

Total at historical cost $ - $ 6,445

The increase in governmental capital assets is due primarily to an increase in construction in progress from the

November 2014 bond authorization. Additional information on the District’s capital assets can be found in Note 4 to

the financial statements.

Long-term debt. At August 31, 2016, the District had total bonded debt outstanding of $465,376,502, a decrease of

$38,603,748 from the prior year. This decrease is due scheduled bond payments and the refunding a portion of

Unlimited Tax School Building and Refunding Bonds, Series 2009A and Unlimited Tax School Building Bonds,

Series 2011.

The “AAA” long-term rating on the District’s Texas bonds reflects the Texas Permanent School Fund guarantee.

The District maintains underlying ratings of Aaa from Moody’s Investors Service and AA+ from Fitch Ratings.

Additional information on the District’s long-term debt can be found in Note 6 to the financial statements.

10

Economic Factors and Next Year’s Budgets and Rates

The unemployment rate for the City of Garland stands at 3.9%. The Dallas Metropolitan Division has a

4.0% unemployment rate as compared to a statewide rate of 4.7% and a national average of 4.9%.

Inflationary trends in the region tend to be similar to the national consumer price index (CPI). The region’s

CPI increased 2.03%; Texas experienced a 1.2% increase in the CPI while the nation experienced a 0.11%

increase.

The District’s student attendance rate has historically been approximately 96%.

The District has appropriated revenues of $462,406,099 and expenditures of $466,495,952 in the 2016-17

budget of the General Fund.

The Debt Service Fund has budgeted revenues of $74,908,883 and expenditures of $74,908,883 in the

2016-17 budget.

The Student Nutrition Services Fund revenue and expenditure budgets for 2016-17 are $31,125,140 and

$30,879,861, respectively.

The 2016-17 budget is based on a total property tax rate of $1.4600 per hundred dollars of assessed value.

The property tax rate for maintenance and operations is $1.04 per hundred dollars of assessed value and has

remained unchanged for nine years. The debt service tax rate is $0.4200 per hundred dollars of assessed

value. The debt service tax rate increased by $0.1067 from 2015-16. This is the second increase in the

debt rate in eleven years and is due to the sale of a portion of the $455,500,000 of bonds approved by the

voters in November 2014. The District’s taxable value for 2016-17 increased 11.3% due to an increase in

commercial and residential property values.

On December 26, 2015 areas of the District in the Cities of Garland and Rowlett were struck by tornados.

Homes and businesses in both cities were damaged or destroyed. Classes resumed as scheduled on January

5, 2015. The District experienced a minimal impact on the current and future budgets. The District

experienced an increase in student transportation cost related to additional bus routes to transport displaced

students to their campuses.

Requests for Information

This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general

overview of the District’s finances as well as demonstrate accountability for funds the District receives. Questions

concerning any of the information provided in this report or requests for additional information should be addressed

to the Director of Finance, Garland ISD, P.O. Box 469026, Garland, Texas, 75046-9026.

11

Basic Financial Statements

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit A-1

STATEMENT OF NET POSITION

AUGUST 31, 2016

The accompanying notes are an integral part of the basic financial statements

Data Governmental

Codes Activities

ASSETS

1110 Cash and Cash Equivalents 375,324,677$

1220 Property Taxes - Receivable - Delinquent 5,296,563

1230 Allowance for Uncollectible Taxes (Credit) (1,268,135)

1240 Due From Other Governments 18,914,025

1290 Other Receivables, net 16,396

1300 Inventories 3,034,529

1410 Prepaid Items 2,807,678

Capital Assets:

1510 Land and Improvements, net 35,235,554

1520 Buildings and Building Improvements, net 398,173,141

1530 Furniture and Equipment, net 33,614,285

1580 Construction in Progress 66,805,221

1000 Total Assets 937,953,934

DEFERRED OUTFLOWS OF RESOURCES

1700 Deferred Charge on Refunding 18,520,153

1705 Deferred Outflow of Resources for Pension Activities 57,927,721

Total Deferred Outflows of Resources 76,447,874

LIABILITIES

2110 Accounts Payable 43,935,923

2140 Interest Payable 1,017,120

2150 Payroll Deductions and Withholdings 3,090,605

2160 Accrued Wages Payable 22,350,005

2180 Due to Other Governments 7,898

2181 Due to External Parties 1,435

2200 Accrued Expenses 2,254,957

2300 Unearned Revenues 915,418

Noncurrent Liabilities:

2501 Due Within One Year 39,591,554

2502 Due in More Than One Year 467,463,720

2531 Long-Term Capital Leases Payable 2,936,191

2540 Net Pension Liability 118,501,570

2532 Vested Vacation Benefits Payable 930,257

2591 Long-Term Claims Liability 1,848,840

2000 Total Liabilities 704,845,493

DEFERRED INFLOWS OF RESOURCES

2605 Deferred Inflow of Resources for Pension Activities 8,794,280

8,794,280

NET POSITION

3200 Net Investment in Capital Assets 186,102,148

3850 Restricted for Debt Service 8,043,823

3860 Restricted for Grant Funds 11,563,497

3861 Restricted for Student Nutrition Services 4,543,133

3900 Unrestricted Net Position 90,509,434

3000 Total Net Position 300,762,035$

12


STATEMENT OF ACTIVITIES

FOR THE FISCAL YEAR ENDED AUGUST 31, 2016


Data 1 3 4

Control Operating

Codes Charges for Grants and

Functions/Programs Expenses Services Contributions

Primary Government:

Governmental Activities:

11 Instruction 326,193,632$ 477,147$ 57,085,547$

12 Instructional Resources And Media Services 8,476,668 458,780

13 Curriculum And Staff Development 15,289,822 5,725,491

21 Instructional Leadership 9,404,380 1,414,542

23 School Leadership 31,430,176 2,108,069

31 Guidance, Counseling, And Evaluation Services 23,134,956 1,875,696

32 Social Work Services 1,057,374 152,851

33 Health Services 6,867,464 5,213,215

34 Student Transportation 15,154,555 134,427

35 Food Service 31,575,592 7,729,332 23,592,876

36 Extracurricular Activities 10,327,317 4,974,632 165,209

41 General Administration 15,353,186 708,070

51 Facilities Maintenance And Operations 40,912,661 209,727 286,974

52 Security And Monitoring Services 6,318,189 11,777

53 Data Processing Services 40,659,486 723,467

61 Community Services 4,063,974 1,021,008

72 Interest On Long-Term Debt 18,083,049 13,721,650

73 Bond Issuance Costs And Fees 434,984

81 Facilities Repairs And Maintenance 1,984,797

93 Payments To Fiscal Agent Of Shared

Services Arrangement 78,603 78,603

95 Payments To Juvenile Justice Alternative

Education Programs 30,168

99 Intergovernmental Charges 692,137 - -

TG TG Total Governmental Activities 607,523,170 13,390,838 114,478,252

Business-Type Activities:

01 01 Concessions 213 - -

TB TB Total Business-Type Activities 213 - -

TP TP Total Primary Government 607,523,383$ 13,390,838$ 114,478,252$

Data

Control

Codes

General Revenues:

Taxes:

MT Property Taxes, Levied For General Purposes

DT Property Taxes, Levied For Debt Service

SF State Aid-Formula Grants (Unrestricted)

GC Grants And Contributions Not Restricted To Specific Programs

IE Investment Earnings

MI Miscellaneous

Transfers

Special Items:

SI Special Item - Gain On Disposal Of Assets

TR Total General Revenues And Special Items

CN Change in Net Position

NB Net Position—Beginning

NE Net Position—Ending

Program Revenues

13

Exhibit B-1

Net (Expense) Revenue and

Changes in Net Position

6 7 8

Primary Government



(268,630,938)$ (268,630,938)$

(8,017,888) (8,017,888)

(9,564,331) (9,564,331)

(7,989,838) (7,989,838)

(29,322,107) (29,322,107)

(21,259,260) (21,259,260)

(904,523) (904,523)

(1,654,249) (1,654,249)

(15,020,128) (15,020,128)

(253,384) (253,384)

(5,187,476) (5,187,476)

(14,645,116) (14,645,116)

(40,415,960) (40,415,960)

(6,306,412) (6,306,412)

(39,936,019) (39,936,019)

(3,042,966) (3,042,966)

(4,361,399) (4,361,399)

(434,984) (434,984)

(1,984,797) (1,984,797)

- -

- -

(30,168) (30,168)

(692,137) - (692,137)

(479,654,080) - (479,654,080)

- (213)$ (213)

- (213) (213)

(479,654,080)$ (213)$ (479,654,293)$

147,147,310 147,147,310

44,156,322 44,156,322

290,555,354 290,555,354

1,614,381 1,614,381

1,152,599 1,152,599

917,065 917,065

(429) 429 -

246,705 - 246,705

485,789,307 429 485,789,736

6,135,227 216 6,135,443

294,626,808 (216) 294,626,592

300,762,035$ -$ 300,762,035$

14

GARLAND INDEPENDENT SCHOOL DISTRCIT

BALANCE SHEET – GOVERNMENTAL FUNDS

AUGUST 31, 2016


Data 10 50

Control General Debt Service

Codes Fund Fund

ASSETS

1110 Cash and Cash Equivalents 200,083,563$ 8,271,610$

1220 Property Taxes Receivable - Delinquent 4,284,309 1,012,254

1230 Allowance for Uncollectible Taxes (Credit) (1,037,486) (230,649)

1240 Due From Other Governments 1,488,707

1260 Due From Other Funds 7,228,869

1290 Other Receivables 13,827

1300 Inventories 985,030

1410 Prepaid Items 1,044,039 -

1000 Total Assets 214,090,858 9,053,215

LIABILITIES

2110 Accounts Payable 5,636,125

2150 Payroll Deductions and Withholdings 3,090,608

2160 Accrued Wages Payable 20,931,535

2170 Due to Other Funds 9,256,586

2180 Due to Other Governments 7,695

2200 Accrued Expenditures 37,278

2300 Unearned Revenues 116,702 -

2000 Total Liabilities 39,076,529 -

DEFERRED INFLOWS OF RESOURCES

2600 Unavailable Revenue - Property Taxes 2,981,215 707,547

Total Deferred Inflows of Resources 2,981,215 707,547

FUND BALANCES

3410 Non-Spendable - Inventories 985,030

3430 Non-Spendable - Prepaid Items 1,044,039

3450 Restricted - Grant Funds

3470 Restricted - Capital Acquisitions and Contractual Obligations

3480 Restricted - Retirement of Long-term Debt 8,345,668

3540 Committed - Self-Insurance 8,000,000

3545 Committed - Local Special Revenue Funds

3550 Assigned - Construction and Capital Expenditures

3600 Unassigned 162,004,045 -

3000 Total Fund Balances 172,033,114 8,345,668

4000 Total Liabilities, Deferred Inflows, and Fund Balances 214,090,858$ 9,053,215$

15

Exhibit C-1

60 Total

Capital Special Governmental

Projects Revenue Fund Funds

150,086,238$ 6,682,130$ 365,123,541$

5,296,563

(1,268,135)

17,425,318 18,914,025

9,242,820 16,471,689

13,827

2,049,499 3,034,529

35,827 1,619,508 2,699,374

159,364,885 27,776,455 410,285,413

40,123,983 208,033 45,968,141

3,090,608

630 2,034,368 22,966,533

6,511,549 15,768,135

203 7,898

19,266 56,544

- 565,508 682,210

40,124,613 9,338,927 88,540,069

- - 3,688,762

- - 3,688,762

2,049,499 3,034,529

35,827 1,619,508 2,699,374

12,437,623 12,437,623

97,915,261 97,915,261

8,345,668

8,000,000

2,330,898 2,330,898

21,289,184 21,289,184

- - 162,004,045

119,240,272 18,437,528 318,056,582

159,364,885$ 27,776,455$ 410,285,413$

16

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit C1-R

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION

AUGUST 31, 2016


Total Fund Balances - Governmental Funds 318,056,582$

The District uses internal service funds to charge the costs of certain activities, such as 7,399,105

self-insurance and printing, to appropriate functions in other funds. The assets and

liabilities of the internal service funds are included in governmental activities in the

statement of net assets. The net effect of this consolidation is to increase net position.

Capital assets used in governmental activities are not financial resources and therefore 928,685,372

are not reported in governmental funds. The capital assets related to internal serive funds

($7,332,710) is included in the net effect of consolidation above.

Accumulated depreciation has not been included in the fund financial statements. The (399,745,019)

accumulated depreciation related to internal service funds ($2,444,859) is included in the

net effect of consolidation above.

Bonds payable and related premiums have not been included in the fund financial statements (502,141,506)

Accrued liabilities for compensated absences due in more than one year have not been (930,257)

reflected in the fund financial statements.

Accreted interest on capital appreciation bonds has not been included in the fund (2,393,636)

financial statements.

Revenue reported as unavailable revenue in the fund financial statements was recognized 3,688,762

as revenue in the government-wide financial statements.

Interest is accrued on outstanding debt in the government-wide financial statements, (1,009,392)

whereas in the fund financial statements interest expenditures are reported when due.

Loss on bond refunding has not been included in the fund financial statements. 18,520,153

Net pension liability has not been included in the fund financial statements (118,501,570)

Deferred outflows of resources relating to pension activities has not been included 57,927,721

in the fund financial statements

Deferred inflows of resources relating to pension activities has not been included (8,794,280)

in the fund financial statements

Net Position of Governmental Activities 300,762,035$

17


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

GOVERNMENTAL FUNDS



Data 10 50

Control General Debt Service

Codes Fund Fund

REVENUES:

5700 Total local and intermediate sources 150,131,264$ 44,165,720$

5800 State program revenues 312,429,563 13,255,162

5900 Federal program revenues 6,331,153 466,488

5020 Total Revenues 468,891,980 57,887,370

EXPENDITURES:

Current:

0011 Instruction 270,394,819

0012 Instructional Resources and Media Services 7,783,675

0013 Curriculum and Instructional Staff Development 9,834,212

0021 Instructional Leadership 8,064,679

0023 School Leadership 29,669,102

0031 Guidance, Counseling, and Evaluation Services 22,006,584

0032 Social Work Services 964,173

0033 Health Services 6,616,875

0034 Student (Pupil) Transportation 12,575,365

0035 Food Services 361,717

0036 Cocurricular/Extracurricular Activities 7,844,771

0041 General Administration 14,710,560

0051 Facilities Maintenance and Operations 37,897,379

0052 Security and Monitoring Services 6,037,386

0053 Data Processing Services 10,722,503

0061 Community Services 2,110,411

Debt Service:

0071 Debt Service-Principal on Long-Term Debt 38,298,252

0072 Debt Service-Interest on Long-Term Debt 20,492,629

0073 Debt Service-Bond Issuance Cost and Fees 434,984

Capital Outlay:

0081 Facilities Acquisition and Construction 117,342

Intergovernmental:

0093 Payments Related to Shared Services Arrangements

0095 Payments to Juvenile Justice Alternative Ed Program 30,168

0099 Other Intergovernmental Charges 692,137 -

6030 Total Expenditures 448,433,858 59,225,865

1100 Excess (Deficiency) of Revenues Over (Under) Expenditures 20,458,122 (1,338,495)

OTHER FINANCING SOURCES (USES):

7901 Issuance of Refunding Bonds 40,560,000

7912 Sale of Real and Personal Property 335,475

7915 Transfers In 63,010

7916 Premium on Issuance of Bonds 6,405,364

7949 Other Resources 2,529 19,270

8911 Transfers Out (9,243,249)

8940 Payment to Refunded Bond Escrow Agent - (47,261,626)

7080 Total Other Financing Sources (Uses) (8,842,235) (276,992)

1200 Net Change in Fund Balances 11,615,887 (1,615,487)

0100 Fund Balance - September 1 (Beginning) 160,417,227 9,961,155

3000 Fund Balance - August 31 (Ending) 172,033,114$ 8,345,668$

18

Exhibit C-2

60 Total

Capital Special Governmental

Projects Revenue Fund Funds

515,486$ 12,617,826$ 207,430,296$

11,846,700 337,531,425

49,600,762 56,398,403

515,486 74,065,288 601,360,124

478,925 25,001,300 295,875,044

60,417 131,933 7,976,025

5,121,292 14,955,504

845,154 8,909,833

558,830 30,227,932

29,430 425,096 22,461,110

81,157 1,045,330

1,786 6,618,661

3,974,573 88,745 16,638,683

29,558,640 29,920,357

1,208,219 9,052,990

71,896 17,324 14,799,780

458,040 51,799 38,407,218

69,330 16,432 6,123,148

37,088,283 529,798 48,340,584

949,236 3,059,647

38,298,252

20,492,629

434,984

54,401,704 54,519,046

78,603 78,603

30,168

- - 692,137

96,632,598 64,665,344 668,957,665

(96,117,112) 9,399,944 (67,597,541)

40,560,000

35,787 371,262

9,242,820 9,305,830

6,405,364

21,799

(9,243,249)

- - (47,261,626)

9,242,820 35,787 159,380

(86,874,292) 9,435,731 (67,438,161)

206,114,564 9,001,797 385,494,743

119,240,272$ 18,437,528$ 318,056,582$

19

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit C-3

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE TO THE STATEMENT OF ACTIVITIES



Total Net Change in Fund Balance - Governmental Funds (67,438,161)$

The District uses internal service funds to charge the costs of certain activities, such as (349,010)

self-insurance and printing, to appropriate functions in other funds. The net loss of

internal service funds are reported with governmental activities. The net effect of this

consolidation is to decrease net position.

Current year capital outlays are expenditures in the fund financial statements but 68,681,228

should be shown as increases in capital assets in the government-wide financial

statements. The net effect of removing the 2016 capital outlays is to increase net

position by total governmental activities additions ($72,453,038) less internal service

fund additions ($3,771,810).

Depreciation is not recognized as an expense in governmental funds since it does not (27,196,537)

require the use of current financial resources. The net effect of the current year's

depreciation is to decrease net position.

Current year long-term debt principal payments, refunding, payments of accreted 88,537,821

interest on capital appreciation bonds, and amortization of premiums are in the fund

financial statements but shown as reductions in long-term debt in the government-wide

financial statements.

Current year accretion on capital appreciation bonds is not reflected in the fund (585,696)

financial statements but is shown as an increase in accreted interest on the government-

wide financial statements.

Interest is accrued on outstanding debt in the government-wide financial statements (13,673)

whereas in the fund financial statements, an interest expenditure is reported when due.

Revenue from property taxes is unavailable in the fund financial statements until it is 90,367

considered available to finance current expenditures. Such revenue is recognized in the

government-wide financial statements when assessed, net of allowance for uncollectible

accounts.

Loss on refunding of debt is not recognized in the governmental funds since 2,595,627

it is not a use of current financial resources.

Amortization of loss on refunding of debt is not recognized as an expense in governmental (2,521,592)

funds since it does not require the use of current financial resources. The net effect of

the current year's amortization is to decrease net position.

Proceeds from debt issuance are recorded as other financing sources in the fund financial (40,560,000)

statements, but are recorded as debt in the government-wide financial statements.

Premium on bonds is considered revenue in the fund financial statements but such (6,405,364)

revenue is recorded as part of debt in the government-wide financial statements.

Changes in the long-term vested sick leave liability is not shown in the fund financial 54,901

statements. The net effect of the current year's decrease is to increase net position.

Net book value of capital assets transferred from the internal service fund to the 27,778

governmental funds since it is not a source of current financial resources.

Amortization and other changes in deferred outflows related to the District's portion 43,387,910

of the TRS net pension liabilty are reported in the government-wide financial statements

Amortization and other changes in deferred inflows related to the District's portion 8,803,587

of the TRS net pension liabilty are reported in the government-wide financial statements

Changes in the net pension liability are not shown in the fund financial statements. (60,973,959)

The net effect of the current year's decrease is to increase net position.

Change in Net Position of Governmental Activities 6,135,227$

20

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit D-1

STATEMENT OF NET POSITION – PROPRIETARY FUNDS

AUGUST 31, 2016


Governmental

Activities

Internal

Service Funds_____________

ASSETS

Current Assets:

Cash and Cash Equivalents 10,201,135$

Due From Other Funds 13,090

Other Receivables 2,569

Prepaid Items 108,304

Total Current Assets 10,325,098

Noncurrent Assets:

Capital Assets:

Land Purchase and Improvements 208,872

Building and Building Improvements 265,990

Furniture and Equipment 6,857,848

Accumulated Depreciation-Other Land Improvements (68,419)

Accumulated Depreciation-Building and Building Improvements (61,830)

Accumulated Depreciation-Furniture and Equipment (2,314,610)

Total Noncurrent Assets 4,887,851

Total Assets 15,212,949

LIABILITIES

Current Liabilities:

Accounts Payable 166,194

Leases Payable 700,784

Interest Payable 7,729

Accrued Wages Payable 28,012

Due to Other Funds 718,079

Claims Liability 1,174,807

Unearned Revenues 233,208

Total Current Liabilities 3,028,813

Noncurrent liabilities:

Capital Lease Payable Long-Term 2,936,191

Claims Liability Long-Term 1,848,840

Total Noncurrent liabilities 4,785,031

Total Liabilities 7,813,844

NET POSITION

Net Investment in Capital Assets 1,250,876

Unrestricted Net Position 6,148,229

Total Net Position 7,399,105$

21


STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS



Business-type Governmental

Activities Activities

Enterprise Internal

Funds Service Funds

OPERATING REVENUES:

Local and Intermediate Sources -$ 5,868,685$

Total Operating Revenues - 5,868,685

OPERATING EXPENSES:

Payroll Costs 1,722,622

Professional and Contracted Services 2,084,815

Supplies and Materials 730,742

Other Operating Costs 213 1,454,234

Total Operating Expenses 213 5,992,413

Operating Income (Loss) (213) (123,728)

NONOPERATING REVENUES (EXPENSES):

Earnings from Temporary Deposits & Investments 13,037

Interest on Capital Lease (50,753)

Loss on Termination of Capital Lease - (124,556)

Total Nonoperating Revenues (Expenses) - (162,272)

Income (Loss) before Transfers (213) (286,000)

Transfer In 429

Transfer Out (63,010)

Change in Net Position 216 (349,010)

Total Net Position - September 1 (Beginning) (216) 7,748,115

Total Net Position - August 31 (Ending) -$ 7,399,105$

22


STATEMENT OF CASH FLOWS – PROPRIETARY FUNDS



Business-type Governmental

Activities Activities

Enterprise Internal

Funds Service Funds

Cash Flows from Operating Activities:

Cash Received from User Charges 3,079,288$

Cash Received from Assessments - Other Funds 3,834,019

Cash Payments to Employees for Services (1,726,742)

Cash Payments for Insurance Claims (1,051,425)

Cash Payments to Suppliers (775,579)

Cash Payments for Other Operating Expenses (106,014)

Cash Payments for Prof. and Contracted Services (2,134,010)

Net Cash Provided by Operating Activities - 1,119,537

Cash Flows from Noncapital Financing Activities:

Transfers from Other Funds (41,464)

Net Cash Used for Noncapital Financing Activities - (41,464)

Cash Flows from Capital Financing Activities:

Acquisition of Capital Assets - (169,655)

Capital Lease Payments (428,317)

Capital Lease Interest Expense - (43,024)

Net Cash Used for Capital Financing Activities - (640,996)

Cash Flows from Investing Activities:

Interest and Dividends on Investments 13,037

Net Increase in Cash and Cash Equivalents - 450,114

Cash and Cash Equivalents at Beginning of the Year - 9,751,021

Cash and Cash Equivalents at the End of the Year - 10,201,135

Reconciliation of Operating Income (Loss) to Net Cash

Provided by Operating Activities:

Operating Income (Loss) (213) (123,728)

Adjustments to Reconcile Operating Income (Loss) to Net

Cash Provided by Operating Activities:

Depreciation 213 800,304

Effect of Increases and Decreases in Current

Assets and Liabilities:

Decrease in Due from Other Funds 283,895

Increase in Other Receivables (1,370)

Increase in Prepaid Items (50,122)

Decrease in Accounts Payable (43,910)

Decrease in Accrued Wages Payable (4,120)

Increase in Due to Other Funds 670,379

Increase in Unearned Revenue 86,189

Decrease in Claims Liability - (497,980)

Net Cash Provided by Operating Activities -$ 1,119,537$

Noncash Investing, Capital, and Financing Activities:

Borrowing Under Capital Lease 3,636,975$

Transfer to Close Fund 429$

Transfer of Equipment to Another Fund (21,546)$

23

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit E-1

STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES

AUGUST 31, 2016


Agency

Funds

ASSETS

Cash and Cash Equivalents 551,267$

Due from External Parties 1,435

Total Assets 552,702

LIABILITIES

Accounts Payable 26,163

Due to Student/Employee Groups 526,539

Total Liabilities 552,702$

24


NOTES TO THE BASIC FINANCIAL STATEMENTS

YEAR ENDED AUGUST 31, 2016

Note 1. Summary of Significant Accounting Policies

The accounting policies of the Garland Independent School District (the “District”) conform to generally

accepted accounting principles (“GAAP”) promulgated by the Governmental Accounting Standards Board

(“GASB”) and other authoritative sources identified in Statement on Auditing Standards No. 69 of the

American Institute of Certified Public Accountants, the rules prescribed by the Texas Education Agency

(“TEA”) Financial Accountability System Resource Guide (the “Resource Guide”), and the requirements of

contracts and grants of agencies from which it receives funds.

The following is a summary of the more significant policies:

Reporting Entity

In evaluating how to define the government for financial reporting purposes, the District’s management has

considered all potential component units. By applying the criteria set forth in generally accepted accounting

principles (“GAAP”), the District has determined that no other organizations require inclusion in its reporting

entity.

Governmental Fund Financial Statements

The District has adopted the provisions of GASB Statement No. 54, Fund Balance Reporting and

Government Fund Type Definitions. The objective of the statement is to enhance the usefulness of fund

balance information by providing clearer fund balance classifications that can be more consistently applied

and by clarifying the existing government fund type definitions. The statement establishes fund balance

classifications that comprise a hierarchy based primarily on the extent to which a government is bound to

observe constraints imposed upon the use of the resources reported in governmental funds. Fund balance

classifications, under GASB 54 are Nonspendable, Restricted, Committed, Assigned, and Unassigned. These

classifications not only reflect the nature of funds but also provide clarity to the level of restriction placed

upon fund balance. Fund balance can have different levels of constraint, such as external versus internal

compliance requirements. Unassigned fund balance is a residual classification within the General Fund. The

General Fund should be the only fund that reports a positive unassigned balance. In all other funds,

unassigned is limited to negative residual fund balance.

In accordance with GASB 54, the District classifies governmental fund balances as follows:

Nonspendable – includes amounts that cannot be spent because they are either not in spendable form, or, for

legal or contractual reasons, must be kept intact. This classification includes inventories, prepaid items, and

long-term receivables.

Restricted – includes fund balance amounts constrained for specific purposes externally imposed by

providers (such as creditors) or amounts restricted due to constitutional provisions or enabling legislation.

This classification includes the child nutrition program, retirement of long term debt, construction programs,

and other federal and state grants.

Committed – includes fund balance amounts constrained for specific purposes internally imposed by the

District through formal action of the highest level of decision making authority. Committed fund balance is

reported pursuant to a resolution passed by the District’s Board of Trustees. This classification includes

campus activity funds and local special revenue fund.

Assigned – includes fund balance amounts self-imposed by the District to be used for a particular purpose.

Per Board of Trustee Policy CE (Local), fund balance can be assigned by the District’s Board, the

Superintendent, or the Assistant Superintendent of Business Operations.

25




Note 1. Summary of Significant Accounting Policies – continued

Unassigned – includes residual positive fund balance within the General Fund which has not been classified

within the other above mentioned categories. Unassigned fund balance may also include negative balances

for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those

specific purposes. When both restricted and unrestricted fund balances are available for use, it is the District’s

policy to use restricted fund balance first, then unrestricted fund balance. Furthermore, committed fund

balances are reduced first, followed by assigned amounts and the unassigned amounts when expenditures are

incurred for purposes for which amounts in any of those unrestricted fund balance classifications can be used.

Government-Wide and Fund Financial Statements

The Statement of Net Position and the Statement of Activities are government-wide financial statements.

They report information on all of the District’s non-fiduciary activities with most of the interfund activities

removed except for interfund services provided and used. Governmental activities include programs

supported primarily by taxes, State foundation funds, grants, and other intergovernmental revenues.

Business-type activities, which are reported separately, rely significantly on fees and charges for support.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function are

offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function.

Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from

goods, services, or privileges provided by a given function and 2) grants and contributions restricted to

meeting operational or capital requirements of a particular function. Taxes are reported as general revenues.

The fund financial statements provide reports on the financial condition and results of operations for three

fund categories – governmental, proprietary, and fiduciary. Since the resources in the fiduciary funds cannot

be used for District operations, they are not included in the government-wide statements. The emphasis on

fund financial statements is on major governmental funds, each displayed in a separate column. All

remaining governmental funds are aggregated and reported as nonmajor funds.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating

revenues and expenses result from providing services and producing and delivering goods in connection with

a proprietary fund’s principal ongoing operations. All other revenues and expenses are non-operating.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide and proprietary fund financial statements use the economic resources measurement

focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded

when a liability is incurred, regardless of the timing of the related cash flows. Property taxes are recognized

as revenues in the year for which they are levied.

Governmental fund financial statements use the current financial resources measurement focus and the

modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and

available. Revenues are considered to be available when they are collectible within the current period or

soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers

revenues to be available if they are collected within 60 days of the end of the current fiscal period.

Expenditures generally are recorded when a liability is incurred. However, debt service expenditures as well

as expenditures related to compensated absences and claims and judgments, are recorded when payment is

due.

Revenues from local sources consist primarily of property taxes. Property tax revenues and revenues

received from the State are recognized under the susceptible to accrual concept. Miscellaneous revenues

are recorded as revenue when received in cash because they are generally not measurable until actually

received. Investment earnings are recorded as earned, since they are both measurable and available.

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Proprietary funds distinguish operating revenues from non-operating revenues. Operating revenues and

expenses generally result from providing services and producing and delivering goods in connection with a

proprietary fund’s principal ongoing operations. The principal operating revenues of the District’s enterprise

fund are charges for items sold in the concession stands (primarily food and beverages). Operating expenses

for the enterprise fund include salaries and the cost of products sold. The District’s enterprise fund ceased

normal operations in August 2015. The principal operating revenues of the District’s internal service funds

are charges to customers for sales and services. Operating expenses for internal service funds include the

cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and

expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the government’s policy to use

restricted resources first, then unrestricted resources as they are needed.

Fund Accounting

The District reports the following major governmental funds:

The General Fund accounts for financial resources related to the general operations of the District, including

financial resources not required to be accounted for in some other fund.

The Debt Service Fund is utilized to account for the accumulation of resources for, and the payment of,

general long-term debt principal, interest, and related costs arising from general obligation bonds.

The Capital Fund accounts for proceeds from sales of bonds and other revenues to be used for authorized

construction and acquisition of capital facilities.

The Special Revenue Fund is used to account, on a project basis, for funds granted from the Federal

Government and the State of Texas, required by the State to be reported as a special revenue fund, and granted

from local sources (including revenues raised by campuses and grants from local not-for-profits).

Proprietary Funds

The Enterprise Fund accounts for activities of the District’s concession stand operations. In August 2015,

the District entered into a contract with Ed Campbell Company to operate the concession stands at District

Stadiums. The District’s enterprise fund ceased regular operations in August 2015.

Internal Service Funds are used to account for services provided by one department to other departments of

the District on a cost-reimbursement basis. For the District, these funds are used to provide workers’

compensation insurance, reproduction, catering services, print services, motor pool, and Curtis Culwell

Center services. In August 2015, the District ceased regular operations of the catering internal service fund.

Catering services will be accounted for in the Special Revenue Fund.

Accrued liabilities include provisions for claims reported and claims incurred but not reported for workers’

compensation insurance. The provision for reported claims is determined by estimating the amount that will

ultimately be paid to each claimant. The provision for claims incurred but not yet reported is estimated based

on the District’s experience since the inception of the programs.

Fiduciary Funds

Agency Funds are custodial in nature and account for activities of student and employee groups. These funds

have no equity. Assets are equal to liabilities and do not include revenues and expenditures for general

operations of the District. This accounting reflects the District’s agency relationship with the organizations.

Fiduciary funds use the accrual basis of accounting to recognize assets and liabilities.

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Official Budget

The District is required by state law to submit annual budgets for the General Fund, Debt Service Fund, and

Student Nutrition Services (included within the Special Revenue Fund) to the Board of Trustees for adoption.

The remaining Special Revenue Funds and Capital Projects Fund utilize project–length budgets, established

by management. These budgets do not correspond to the District’s fiscal year and are not adopted by the

Board of Trustees. Each budget is presented on the modified accrual basis of accounting, which is consistent

with generally accepted accounting principles.

The following procedures are utilized in establishing the budgetary data reflected in the financial statements:

Prior to August 20 of the preceding fiscal year, the District prepares a budget for the next succeeding fiscal

year beginning September 1. The operating budget includes proposed expenditures and the means of

financing them.

A meeting of the Board of Trustees is then called for the purpose of adopting the proposed budget after ten

days public notice of the meeting has been given. Prior to September 1, the Board of Trustees legally enacts

the budget through passage of a resolution.

The approved budget is filed with the Texas Education Agency (TEA).

Once a budget is approved, it can be amended at the function and fund level only by approval of a majority

of the members of the Board of Trustees. Amendments are presented to the Board at their regular meetings.

Each amendment must have Board approval. Such amendments are made before the fact, are reflected in the

official minutes of the Board, and are not made after fiscal year-end as dictated by law. Amendments were

made to other sources and uses in the Debt Service Fund. These amendments are related to the issuance of

refunding bonds.

Each budget is prepared and controlled by management at the revenue and expenditure function/object level.

Budgeted amounts are as amended by the Board of Trustees. All budget appropriations lapse at year-end.

Cash and Cash Equivalents

For the purposes of the statement of cash flows, investments are considered to be cash equivalents if they are

highly liquid with maturity within three months or less.

Investments

Investments consist of balances in privately managed public funds investment pools and investments in

United States (U.S.) securities and U.S. Agency securities. The District reports all investments at fair value,

except for investment pools. The District’s investment pools are valued and reported at amortized cost,

which approximates fair value.

The District categorizes fair value measurements of its investments based on the hierarchy established by

generally accepted accounting principles.

The District categorizes fair value measurements of its investments based on the hierarchy established by

generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the

valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets

for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant

unobservable inputs. The District’s local government investment pools are recorded at amortized costs as

permitted by GASB Statement No. 79, Certain Investment Pools and Pool Participants.

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Property Taxes

Property taxes are levied by October 1 on the assessed value listed as of January 1 for all real and business

personal property located in the District in conformity with Subtitle E, Texas Property Tax Code. Taxes

are due upon receipt of the tax bill and are delinquent if not paid before February 1 of the year following

the year in which imposed. On January 31 of each year, a tax lien attaches to property to secure the payment

of all taxes, penalties, and interest ultimately imposed. Property tax revenues are considered available

when due or past due and receivable within the current period.

The tax rates assessed for the year ended August 31, 2016 to finance General Fund operations and the

payment of principal and interest on general obligation long-term debt were $1.0400 and $0.3133 per $100

valuation, respectively, for a total of $1.3533 per $100 valuation.

Delinquent taxes are prorated between maintenance and debt service based on rates adopted for the year

of the levy. Allowances for uncollectible tax receivables within the General and Debt Service Funds are

based on historical experience in collecting property taxes. Uncollectible personal property taxes are

periodically reviewed and written off, but the District is prohibited from writing off real property taxes

without specific statutory authority from the Texas Legislature. At August 31, 2016, taxes receivable net

of estimated uncollectible taxes, aggregated $3,246,823 and $781,605 for the General Fund and Debt

Service Fund, respectively.

Inventories and Prepaid Items

Supplies and materials are recorded as expenditures when requisitioned. Inventories of supplies on the

balance sheet are recorded at cost using the average cost method. Inventories of food commodities are

recorded at market values supplied by the Texas Department of Agriculture and are recorded as inventory

when received. Inventory items are recorded as expenditures when they are consumed. Supplies are used

for almost all functions of activity while food commodities are used only in the Student Nutrition Services

Fund.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as

prepaid items in both government-wide and fund financial statements.

Deferred outflows/inflows of resources

In addition to assets, the statement of financial position will sometimes report a separate section for

deferred outflows of resources. This separate financial statement element, deferred outflows of resources,

represents a consumption of net position that applies to a future period(s) and so will not be recognized as

an outflow of resources (expenditure/expense) until then.

The District only has two items that qualify for reporting in this category. First, deferred charges on

refunding reported in the government-wide statement of net position. A deferred charge on refunding

results from the difference in the carrying value of refunded debt and its reacquisition price. This amount

is deferred and amortized over the shorter of the life of the refunded or refunding debt. Second, deferred

outflows of resources for pensions reported in the government-wide statement of net position. A deferred

outflow of resources for pensions, results from pension plan contributions made after the measurement

date of the net pension liability and the results of 1) differences between expected and actual actuarial

earnings on pension plan investments, 2) changes in actuarial assumptions, 3) differences between

expected and actual actuarial experiences and 4) changes in the District’s proportional share of pension

liabilities. The deferred outflow of resources related to pensions resulting from District Contributions

subsequent to the measurement date will be recognized as a reduction of the net pension liability in the

next fiscal year. The deferred outflows resulting from difference between projected and actuals on pension

plan investments will be amortized over a closed five year period. The remaining pension related deferred

outflows will be amortized over the expected remaining service lives of all employees (active and inactive

employees) that are provided with pensions through the pension plan.

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Deferred outflows/inflows of resources (Continued)

In addition to liabilities, the statement of financial position will sometimes report a separate section for

deferred inflows of resources. This separate financial statement element, deferred inflows of resources,

represents an acquisition of net position that applies to a future period(s) and so will not be recognized as

an inflow of resources (revenue) until that time. The District has two items of this type. First, unavailable

revenue from property taxes exists under the modified accrual basis of accounting and is reported only in

the governmental funds balance sheet. These amounts are deferred and recognized as an inflow of

resources in the period in which the amounts become available. Second, deferred inflows of resources for

pensions reported in the government-wide statement of net position. These deferred inflows result

primarily from 1) changes in actuarial assumptions; 2) differences between expected and actual actuarial

experiences and 3) changes in the District’s proportional share of the pension liabilities. These pension

related deferred inflows will be amortized over the expected remaining service lives of all employees

(active and inactive employees) that are provided with pensions through the pension plan.

Pensions

The fiduciary net position of the Teacher Retirement System of Texas (TRS) has been determined using

the flow of economic resources measurement focus and full accrual basis of accounting. This includes for

purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of

resources related to pensions, pension expense, and information about assets, liabilities and additions

to/deductions from TRS’s fiduciary net position. Benefit payments (including refunds of employee

contributions) are recognized when due and payable in accordance with the benefit terms. Investments are

reported at fair value.

Interfund Receivables and Payables

Advances between funds are accounted for in the appropriate interfund receivable and payable accounts.

All legally authorized transfers are appropriately treated as transfers and are included in the results of

operations. Such balances are eliminated within the governmental and business-type activities for the

government-wide financial statements. Any residual balances outstanding between the governmental and

business-type activities are reported in the government-wide financial statements as “internal balances.”

Capital Assets

Capital assets, which include land, buildings, furniture and equipment, and construction in progress are

reported in the government-wide financial statements. Capital assets are capitalized by the District if the

cost of the item is more than $5,000. Such assets are recorded at historical cost if purchased or constructed.

Donated capital assets are recorded at estimated fair market value at the date of donation. The cost of

normal maintenance and repairs that do not add to the value of the assets or materially extend assets lives

are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are

constructed.

Land improvements, buildings, and furniture and equipment of the District are depreciated using the

straight-line method over the following estimated useful lives:

Assets Years

Land Improvements 20 Years

Buildings and Improvements 10 - 45 Years

Furniture and Equipment 3 - 20 Years

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Encumbrances

Encumbrance accounting, which is used in all government fund types, utilizes purchase orders, contracts,

and other commitments to reserve the applicable appropriation. Under Texas law, appropriations, including

those in the Capital Projects Fund, lapse at August 31 and encumbrances outstanding at that time are to be

either canceled or appropriately provided for in the subsequent fiscal year’s budget to provide for the

liquidation of the prior commitments. The Board has not authorized any unexpended budgeted projects to

carry over into the next fiscal year.

Data Control Codes

These codes refer to the account code structure prescribed by the TEA in the Resource Guide.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles

requires management to make estimates and assumptions that affect certain reported amounts and

disclosures. Accordingly, actual results could differ from those estimates.

The amount of State foundation revenue a school district earns for a year can and does vary until the time

at which final values for each of the factors in the formula become available. Availability can be as late

as midway into the next fiscal year. It is possible that the foundation revenue estimate as of August 31,

2016 will change.

In the current fiscal year, the District implemented the following new standards:

GASB Statement No. 72, Fair Value Measurement and Application, addresses accounting and financial

reporting issues related to fair value measurements. The definition of fair value is the price that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at

the measurement date. This Statement provides guidance for determining a fair value measurement for

financial reporting purposes. This Statement also provides guidance for applying fair value to certain

investments and disclosures related to all fair value measurements.

GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not

within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and

68, clarifies the application of certain provisions of Statement No. 68 with regard to information that is

required to be presented as notes to the 10-year schedules of required supplementary information about

investment-related factors that significantly affect trends in the amounts reported.

GASB Statement No. 79, Certain External Investment Pools and Pool Participants, addresses accounting and

financial reporting for certain external investment pools and pool participants. Specifically, it establishes

criteria for an external investment pool to qualify for making the election to measure all of its investments at

amortized cost for financial reporting purposes. This Statement establishes additional note disclosure

requirements for qualifying external investment pools that measure all of their investments at amortized cost

for financial reporting purposes and for governments that participate in those pools. Those disclosures include

information about any limitations or restrictions on participant withdrawals.

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Note 2. Cash and Investments

The District’s funds are required to be deposited under the terms of a depository contract pursuant to the School

Depository Act. The depository bank deposits for safekeeping and trust with the District’s agent (Bank of

America Global Securities Operations) approved pledged securities in an amount sufficient to protect District

funds on a day-to-day basis during the period of the contract. The pledge of approved securities is waived only

to the extent of the dollar amount of Federal Deposit Insurance Corporation (FDIC) insurance.

At August 31, 2016, the carrying amount of the District’s deposits was $10,904,473 and the bank balance was

$2,142,963. In addition, the District had various petty cash balances held at different locations amounting to

$38,251.

The District’s entire bank balance on August 31, 2016 was covered by federal depository insurance or by

collateral held by the District’s agent in the District’s name. During the period, the District’s deposits were

fully secured with FDIC coverage and pledged collateral.

The District’s investment policy contains the following objectives:

A. Assure the safety of District funds.

B. Maintain sufficient liquidity to provide adequate and timely working funds.

C. Match the maturity of investment instruments to the daily cash flow requirements.

D. Diversify investments as to maturity, instrument, and financial institution, where permitted.

As a means of limiting exposure to fair value losses that could occur from rising interest rates, the District

limits the maturities of investments to one year from the time of purchase in all funds except capital projects

and debt service.

The District recognizes that investment risks can result from market price changes. Portfolio diversification is

employed as a way to control credit risk. Investment officers are expected to display prudence in the selection

of securities as a way to minimize risk. No individual investment transaction shall be undertaken which

jeopardizes the total capital position of the overall portfolio.

At August 31, 2016, the District’s exposure to interest rate risk, as measured by the segmented time distribution

by investment type, is summarized below:

Carrying

Amount/

Rating Fair Value Less than 1 1 to 3 4 to 6

TexPool AAAm 244,964,068$ 244,964,068$

Texas CLASS AAAm 66,326,567 66,326,567

Lone Star AAA 28,648,527 28,648,527

Federal Home Loan agency discount note Aaa, Prime-1 24,909,917 24,909,917

Blackrock Liquidity Fund Aaa-mf 84,141 84,141 -$ -$

Total Investments 364,933,220$ 364,933,220$ -$ -$

Investment Maturities in Months

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Note 2. Cash and Investments – continued

Investments’ fair value measurements are as follows at August 31, 2016:

Investments Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs

Federal Home Loan agency discount note 24,909,917 24,909,917

Blackrock Liquidity Fund 84,141 -$ 84,141 -$

Total Investments 24,994,058$ -$ 24,994,058$ -$

Fair Value Measurements Using

An 11-member board of pool members oversees Lone Star. The fair value of the District’s position in Lone

Star is the same as the value of the pool shares. Lone Star is operated in a manner consistent with the SEC’s

Rule 2A-7 of the investment company Act of 1970.

Lone Star’s Government Overnight Fund is authorized for the following investments:

Obligations of the United States Government, its agencies or instrumentalities.

Other obligations, the principal and interest of which are unconditionally guaranteed or insured by,

or backed by the full faith and credit of, the United States Government, or its agencies and

instrumentalities.

Fully collateralized repurchase agreements that meet the following criteria: (1) have a defined

termination date; (2) are secured by obligations of the United States or its agencies and

instrumentalities; (3) require the securities being purchased by the Government Overnight Fund to

be pledged to the Government Overnight Fund, held in the Government Overnight Fund’s name, and

deposited at the time the investment is made with the Government Overnight Fund or with a third

party selected and approved by the Government Overnight Fund; and (4) are placed through a primary

government securities dealer, as defined by the Federal Reserve, or a financial institution doing

business in this state. The market value of repurchase agreement collateral is required to initially be

102 percent of the principal amount of such repurchase agreement. Thereafter, the market value of

such collateral will be determined (marked-to-market) daily and reset to 102 percent of the principal

amount if it falls below 100 percent.

The Government Overnight Fund may lend up to 25 percent of its securities pursuant to a reserve

repurchase agreement authorized under the Investment Act. Any funds obtained pursuant to a reserve

repurchase agreement must be invested in authorized Government Overnight Fund investments and

match the term of any reverse repurchase agreement may not exceed 90 days.

No-load money market mutual funds regulated by the Securities and Exchange Commission (SEC)

that invest exclusively in authorized Government Overnight Fund investments, provided the

Government Overnight Fund shall not invest its funds in any one money market mutual fund in an

amount that exceeds (i) 25 percent of the Government Overnight Fund’s total assets or (ii) 10 percent

of the total assets of such money market mutual fund.

Lone Star’s Government Overnight Fund seeks to maintain a dollar-weighted average maturity of 60 days or

fewer. As of August 31, 2016, the fund had a weighted average maturity of 23 days.

The Texas Comptroller of Public Accounts oversees TexPool. The fair value of the District’s position in

TexPool is the same as the value of the pool shares. TexPool is operated in a manner consistent with the SEC’s

Rule 2A-7 of the investment company Act of 1970.

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TexPool is authorized for the following investments:

Obligations of the United States Government, its agencies or instrumentalities with a maximum final

maturity of 397 days for fixed rate securities and 24 months for variable rate notes.

Fully collateralized repurchase agreements or reverse repurchase agreements (i) with defined

termination dates, (ii) secured obligations of the United States, its agencies or its instrumentalities,

including mortgage-backed securities, (iii) that require purchased securities to be pledged to the

investing entity or a third party, and (iv) that are placed through primary government securities

dealers or a financial institution doing business in the State of Texas. The maximum maturity on

repurchase agreements may not exceed 90 days unless the repurchase agreements have a put option

that allows TexPool to liquidate the position at par with no more than 7 day notice to the counterparty.

The maximum maturity on repurchase agreements may not exceed 181 days.

No-load money market mutual funds that (i) are registered with and regulated by the Securities and

Exchange Commission, (ii) provide a prospectus and other information required by the Securities

Exchange Act of 1934 or the Investment Company Act of 1940, (iii) maintain a dollar weighted

average stated maturity of 90 days or less, (iv) included in its investment objectives the maintenance

of a stable net asset value of $1.00, and (v) are rated or equivalent by at least one nationally

recognized statistical rating organization (“NRSRO”).

Securities lending programs that comply various limitations.

The weighted average maturity of TexPool cannot exceed 60 days. As of August 31, 2016, TexPool had

a weighted average maturity of 42 days.

Texas CLASS is administered by a board of pool members. The fair value of the District’s position in Texas

CLASS is the same as the value of the pool shares. Texas CLASS is operated in a manner consistent with the

SEC’s Rule 2A-7 of the investment company Act of 1970.

Texas CLASS is authorized for the following investments:

Obligations, including letters of credit, of the United States or its agencies and instrumentalities with

a maximum maturity of 397 days, except that certain permitted variable rate securities may be

purchased with final maturities greater than 397 days, as described in Paragraph 12 (d) below.

Direct obligations of the State of Texas or its agencies and instrumentalities.

Other obligations, the principal and interest of which are unconditionally guaranteed or insured by or

backed by the full faith and credit of the State of Texas or the United States or their respective

agencies and instrumentalities, including obligations that are fully guaranteed or insured by the

Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States.

Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as

to investment quality by a nationally recognized investment rating firm not less than A or its

equivalent.

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Certificates of deposit or share certificates if the certificate is issued by a depository institution that

has its main office or a branch office in this state and is: (1) guaranteed or insured by the Federal

Deposit Insurance Corporation or its successor the National Credit Union Share Insurance Fund or

its successor; (2) secured by obligations that are described by Section 2256.009(a) of Chapter 2256,

Texas Government Code as amended, including mortgage backed securities directly issued by a

federal agency or instrumentality that have a market value of not less than the principal amount of

the certificates, but excluding those mortgage backed securities of the nature described by Section

2256.009{b), Texas Government Code, as amended; or {3) secured in any other manner and amount

provided by law for deposits of the investing entity. In addition, an investment in certificates of

deposit is authorized if (1) the funds are invested by an investing entity through (A) a broker that has

its main office or a branch office in Texas and is selected from a list adopted by the investing entity,

or (B) a depository institution that has its main office or a branch office in Texas and that is selected

by the investing entity, (2) the broker or depository institution selected by the investing entity under

{1) above arranges for the deposit of the funds in certificates of deposit in one or more federally

insured depository institutions, wherever located, for the account of the investing entity, {3) the full

amount of the principal and accrued interest of each of the certificates of deposit is insured by the

United States or an instrumentality of the United States, and (4) the investing entity appoints the

depository institution selected by the investing entity under {1) above, an entity described by Section

2257.041{d) or a clearing broker-dealer registered with the Securities and Exchange Commission

and operating pursuant to Securities and Exchange Commission Rules 15c3-3 (17 C.F.W. Section

240.15c3-3) as custodian for the investing entity with respect to the certificates of deposit issued for

the account of the investing entity, .

Repurchase agreements that comply with the Investment Act. No more than 25% of the portfolio of

Texas CLASS shall be invested in term repurchase agreements and no more than 5% of the portfolio

of Texas CLASS may be invested in term repurchase agreements with maturities exceeding 90 days.

Repurchase agreements shall be 102% collateralized by obligations of the United States Treasury or

its agencies and instrumentalities in accordance with the provisions of the Public Securities

Association Master Agreement on file with the Program Administrator pertaining to repurchase

agreement operating procedures.

Securities lending programs that comply with various limitations.

Bankers' acceptances that comply with the Investment Act

Commercial paper that complies with the Investment Act; provided that no more than 25% of the assets of Texas

CLASS shall be invested in commercial paper of any one industry, except that the 25% limitation shall not apply to

commercial paper of banking and financial institutions.

No-load money market mutual funds that comply with the Investment Act.

Guaranteed investment contracts that comply with the Investment Act.

Bonds issued, assumed or guaranteed by the State of Israel that are also backed by the full faith and

credit of the United States of America.

The weighted average maturity of Texas CLASS cannot exceed 60days. As of August 31, 2016, Texas CLASS

has a weighted average maturity of 47 days.

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In April of 2016, Bank of America transitioned Garland ISD’s sweep product from BofA Treasury Reserves,

Capital Share Class to Blackrock Liquidity Fund Institutional T-Fund. Blackrock Liquidity Fund Institutional

Fund T-Fund is administered by a team of investment professionals. The fair value of the District’s position in

Blackrock Liquidity Fund Institutional T-Fund is the same as the value of the mutual fund shares. Blackrock

Liquidity Fund Institutional T-Fund is operated in a manger consistent with the SEC’s Rule 2A-7 of the

Investment Company Act of 1940.

The Fund invests at least 99.5% of its total assets in cash, U.S. Treasury bills, notes and other obligation

issued or guaranteed as to principal and interest by the U.S. Treasury, and repurchase agreement secure

by such obligation or cash.

T-Fund seeks current income as is consistent with liquidity and stability of principal. As of August 31, 2016,

Blackrock Liquicity Fund Institutional T-Fund had a weighted average maturity of 51 days.

To manage credit risk, all investments are made in the name of the Garland Independent School District. All

investments other than pools and repurchase agreements are purchased with the delivery versus payment

method and are recorded in the District’s name on the Federal Reserve’s book entry system and confirmed to

the District via safekeeping receipt maintained on the books of the depository bank’s safekeeping department.

During the period, the District did not hold any investments in commercial paper. The District neither enters

into reverse repurchase agreements nor trades in options or future contracts. Additionally, the District does not

participate in any Securities Lending Programs.

Fair Value Measurements

The District categorizes its fair value measurements within the fair value hierarchy established by generally

accepted accounting principles. GASB Statement No. 72, Fair Value Measurement and Application,

provides a framework for measuring fair value which establishes a three-level fair value hierarchy that

describes the inputs that are used to measure assets and liabilities.

Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets

that a government can access at the measurement date.

Level 2 inputs are inputs-other than quoted prices included within Level 1 – that are observable

for an asset or liability, either directly or indirectly.

Level 3 inputs are unobservable inputs for an asset or liability.

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3

inputs. If a price for an identical asset or liability is not observable, a government should measure fair value

using another valuation technique that maximizes the use of relevant observable inputs and minimizes the

use of unobservable inputs. If the fair value of an asset or a liability is measured using inputs from more

than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority

level input that is significant to the entire measurement. The fair value of the U.S. Government Agency

securities on August 31, 2016 was determined based on Level 2 inputs.

In accordance with GASB Statement No. 79, Certain External Investment Pools and Pool Participants, the

Local Government Investment Pools do not have any limitations and restrictions on withdrawals such as

notice periods or maximum transaction amounts. These pools do not impose any liquidity fees or

redemption gates.

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Note 3. Due From Other Governments

The District participates in a variety of federal and state programs from which it receives grants to partially or

fully finance certain activities. In addition, the District receives entitlements from the State through the School

Foundation and Per Capita programs. Amounts due from federal and state governments as of August 31, 2016,

are summarized below and are reported on the combined financial statements as Due from Other Governments.

Foundation

School Federal State

Fund Program Grants Grants Total

General Fund $ 1,488,707 $ 1,488,707

Special Revenue Fund - $ 7,691,536 $ 9,733,782 17,425,318

Total $ 1,488,707 $ 7,691,536 $ 9,733,782 $ 18,914,025

Note 4. Capital Assets

Capital asset activity of the District for the year ended August 31, 2016, was as follows:

Capital Assets

Governmental Activities: Beginning Balance Ending Balance

9/1/2015 Additions Retirements Transfers 8/31/2016

Non-Depreciable Assets

Land 14,077,107$ 14,077,107$

Construction In Progress 18,948,344 61,078,158$ -$ (13,221,281)$ 66,805,221

Total Non-Depreciable Assets 33,025,451 61,078,158 - (13,221,281) 80,882,328

Depreciable Assets

Land Improvements 34,899,136 1,280,505 - 8,767,095 44,946,736

Building & Building Improvements 683,473,819 557,398 - 4,173,292 688,204,509

Furniture & Equipment 115,861,877 9,536,979 3,728,818 314,468 121,984,506

Total Depreciable Assets 834,234,832 11,374,882 3,728,818 13,254,855 855,135,751

Less Accumulated Depreciation for:

Land Improvements 22,219,337 1,568,952 - - 23,788,289

Building & Building Improvements 273,861,955 16,169,413 - - 290,031,368

Furniture & Equipment 81,089,043 10,258,476 3,004,640 27,342 88,370,221

Total Accumulated Depreciation 377,170,335 27,996,841 3,004,640 27,342 402,189,878

Governmental Activities-Capital Assets,

being depreciated, net 457,064,497 (16,621,959) 724,178 13,227,513 452,945,873

Governmental Activities-Capital Assets, Net 490,089,948$ 44,456,199$ 724,178$ 6,232 533,828,201$

Business Type Activities: Beginning Balance Ending Balance

9/1/2015 Additions Retirements Transfers 8/31/2016

Depreciable Assets

Furniture & Equipment 33,574$ -$ -$ (33,574)$ -$

Less Accumulated Depreciation for:

Furniture & Equipment 27,129 213 - (27,342) -

Business Type-Capital Assets, Net 6,445$ (213)$ -$ (6,232)$ -$

Total Governmental Activities - Capital Assets include cost of assets held in internal service funds and related

accumulated depreciation amounting to $7,332,710 and $2,444,859 respectively.

37




Note 4. Capital Assets – continued

Depreciation expense was charged to governmental functions as follows:

11 Instruction 14,121,062$

12 Instructional Resources and Media Services 499,272

13 Curriculum Development and Instructional Staff Development 13,975

21 Instructional Leadership 241,277

23 School Leadership 270,527

31 Guidance, Counseling and Evaluation Services 102,013

33 Health Services 100,024

34 Student (Pupil) Transportation 2,345,897

35 Food Services 1,421,890

36 Cocurricular/Extracurricular Activities 1,337,095

41 General Administration 252,150

51 Plant Maintenance and Operations 2,857,813

52 Security and Monitoring Services 290,153

53 Data Processing Services 2,456,625

61 Community Services 886,764

Internal Service Fund Depreciation 800,304

27,996,841$

Depreciation expense of $215 was charged to the Enterprise Fund and is included in other operating costs.

As of August 31, 2016, the District had the following major commitments with respect to unfinished major

capital projects.

Project Remaining

Authorization Commitment

HVAC Equipment 4,050,000$ 3,868,335$

District Flooring 5,008,667 4,544,575

District Roofing 4,304,242 4,157,649

Garland HS Renovations 19,614,780 18,811,840

Lakeview HS Renovations 20,068,309 9,133,395

Naaman Forest HS Renovation 17,894,745 14,650,626

Career & Technology HS 34,438,200 28,597,628

Austin Academy Renovations 7,100,091 6,666,471

Bussey MS Addition/Renovation 8,598,935 8,319,551

Sam Houston MS Renovations 5,226,822 4,706,294

Brandenburg Add/Renovation 5,945,200 5,730,027

Sellers MS Renovations 6,228,787 5,975,265

Webb MS Addition/Renovation 6,232,726 6,006,332

Coyle Middle School 6,346,633 6,345,093

Back ES Renovations 4,286,680 3,216,745

Natatorium 28,551,070 27,363,186

MAN/WAN 25,000,000 18,840,853

Softball/Baseball Fields 12,314,482 2,004,866

LAN/WiFi 18,906,395 17,076,264

Technology Update 15,697,016 14,057,151

Total 255,813,781$ 210,072,146$

38




Note 5. Unearned Revenue

Governmental funds unearned revenue at August 31, 2016 consisted of the following:

Special

General Revenue

Fund Fund Total

Athletic and Other Local 116,702$ -$ 116,702$

Food Service Meals - 539,545 539,545

Grants - 25,963 25,963

116,702$ 565,508$ 682,210$

Note 6. Long-Term Obligations

The following is a summary of changes in long-term obligations of the District for the year ended

August 31, 2016:

September 1, New Obligations August 31,

2015 Obligations Retired or 2016 Due Within

Obligations Incurred Transferred Obligations One Year

Governmental Activities:

Bonds and Notes Payable:

General obligation bonds 501,756,118$ 40,560,000$ 79,333,252$ 462,982,866$ 36,396,442$

Accreted interest 2,224,132 585,696 416,192 2,393,636 674,980

Premium on bond issuance 41,541,653 6,405,364 8,788,377 39,158,640 -

Total Bonds and Notes

Payable 545,521,903 47,551,060 88,537,821 504,535,142 37,071,422

Other Liabilities:

Net Pension Liability 57,527,611 60,973,959 118,501,570

Workers compensation

self-insurance liability 3,521,627 557,722 1,055,702 3,023,647 1,174,807

Capital Leases 1,055,034 3,636,975 1,055,034 3,636,975 700,784

Vested sick leave 1,717,913 487,011 630,126 1,574,798 644,541

Total Other Liabilities 63,822,185 65,655,667 2,740,862 126,736,990 2,520,132

Total Governmental Activities

Long-term Liabilities 609,344,088$ 113,206,727$ 91,278,683$ 631,272,132$ 39,591,554$

For governmental activities, it is the District’s general policy to liquidate claims, judgments, compensated absences

and net pension liabilities by the general fund.

39




Note 6. Long-Term Obligations – continued

Bonds payable and contractual obligations at August 31, 2016 are composed of the following individual issues: Amounts Amounts

Amounts Outstanding at Accumulated Outstanding at

Interest Original September 1, Retired/ Interest August 31,

Description Rate Issue 2015 Issued Refunded Accretion 2016

School Building and Refunding

Bonds - 2009A

Matures 2009 - 2029 4.0% to 5.0% 53,210,000$ 43,150,000$ 10,685,000$ 32,465,000$

Qualified School Construction

Bonds - 2009B

Matures 2019 - 2024 0.0% 10,185,000 10,135,000 10,135,000

Unlimited Tax Refunding

Series - 2010

Matures 2011 - 2017 2.0% to 4.0% 9,845,000 6,115,000 2,895,000 3,220,000

Unlimited Tax School Building

Series - 2011

Matures 2012 - 2031 2.0% to 5.0% 61,615,000 47,520,000 37,290,000 10,230,000


Series - 2011A

Matures 2012 - 2023 0.5% to 2.9% 52,335,609 42,571,118 4,568,252 2,393,636 40,396,502


Series - 2012

Matures 2016 - 2028 2.0% to 5.0% 99,425,000 99,425,000 6,760,000 92,665,000


Series - 2012A

Matures 2013 - 2024 0.35% to 3.0% 25,799,604 20,410,000 1,800,000 18,610,000

Qualified School Construction

Bonds - 2012

Matures 2022 - 2031 4.009% 12,485,000 12,485,000 12,485,000


Series - 2014

Matures 2015 - 2024 4.00% 26,725,000 26,625,000 3,720,000 22,905,000

Unlimited Tax Building and Refunding

Series - 2015A

Matures 2016 - 2035 2.0% to 5.0% 185,740,000 185,740,000 5,035,000 180,705,000

Unlimited Tax School Building

Bonds - 2015B

Matures 2016 - 2017 2.0% to 3.0% 7,580,000 7,580,000 6,580,000 1,000,000


Bonds - 2016

Matures 2020 - 2031 2.5% to 5.0% 40,560,000 - 40,560,000 - - 40,560,000

Total 585,505,213$ 501,756,118$ 40,560,000$ 79,333,252$ 2,393,636$ 465,376,502

Accumulated Interest Accretion (2,393,636)

Total Principal Outstanding - August 31, 2016 462,982,866$

40




Note 6. Long-Term Obligations - continued

These bonds and accreted interest are secured by ad valorem taxes levied against all taxable property and are

serviced by the Debt Service Fund with an apportionment of the ad valorem tax levy. Interest rates on the

bonds range from 0.00% to 5.00% and are due through 2035. At August 31, 2016, $8,781,090 was available

in the Debt Service Fund to service these bonds. Arbitrage rebates are paid from interest earnings of the Capital

Projects Fund. Sick leave is paid from the General.

In May 2016, the District issued $40,560,000 of Unlimited Tax Refunding Bonds, Series 2016. All of the

proceeds ($40,560,000), plus a District contribution of $713,126, were used to provide resources to purchase

U.S. Agency securities that were placed in an irrevocable trust for the purpose of generating resources for debt

service payments of $9,901,763 on Unlimited Tax School Building and Refunding Bonds, Series 2009A as of

the February 2019 call date and $38,892,000 on Unlimited Tax School Building Bonds, Series 2011. As a

result the liability has been removed from the governmental activities column of the statement of net assets.

The reacquisition price was more than the net carrying amount of the old debt resulting in a loss on refunding

of $2,595,627. This loss is netted with previous losses on refunding and carried as a deferred outflow of

resources and amortized over the remaining life of the refunded debt which is the same as the new debt. This

advance refunding decreased total debt service payment over the next sixteen years by $4,878,357 and resulted

in an economic gain of $4,157,857. The issuance cost of $416,864 was expensed. The premium received of

$6,405,364 is being amortized over the life of the refunded debt which is the same as the new debt. Series 2016

bears interest at rates between 2.5% and 5.0% and matures in 2031.

In 2016, the District defeased certain bonds by placing the proceeds of new bonds in an irrevocable trust to

provide for all debt service as of the call dates. Of the bonds defeased, $41,035,000 remains outstanding as of

August 31, 2016 and is composed of the following:

Refunded Redemption Principal

Refunding Bond Series Bond Series Date in Escrow

Unlimited Tax Refunding Unlimited Tax School

Series - 2016 Building and Refunding

Bonds - 2009A 2/15/2019 8,625,000$

Unlimited Tax Refunding Unlimited Tax

Bonds - 2016 School Building

Bonds - 2011 2/15/2020 32,410,000$

Total Outstanding 41,035,000$

The annual requirements to pay principal and interest on the bond obligations outstanding as of August 31,

2016 are as follows:

Interest

Year Ended (including

August 31 Principal accreted interest) Requirements

2017 36,396,442$ 20,673,637$ 57,070,079$

2018 34,721,334 20,788,579 55,509,913

2019 31,755,090 19,325,547 51,080,637

2020 32,765,000 14,891,017 47,656,017

2021 35,475,000 13,327,936 48,802,936

2022 - 2026 152,185,000 44,107,650 196,292,650

2027 - 2031 90,005,000 19,700,506 109,705,506

2032 - 2035 49,680,000 4,031,795 53,711,795

462,982,866$ 156,846,667$ 619,829,533$

As of August 31, 2016, the District has $259,445,000 of authorized but unissued general obligation bonds from

the November 2014 voted authorization. Accreted interest of $2,393,636 is included in the interest column.

41




Note 7. Compensated Absences

Employees of the District are granted vacation and sick leave annually. Vacation must be taken within the

fiscal year; thus, the District has no liability for unused vacation pay. Sick leave days are accumulated from

year to year. However, only qualified employees are paid for sick leave days not taken upon retirement.

Qualified employees (employees with ten or more years of service in the District who retire or take disability

retirement and who have unused accumulated local sick leave or state sick or personal leave accrued prior to

the 1995-96) shall be paid for up to 20 days of leave at the daily rate at the time of retirement. The liability for

compensated absences related to qualified employees is approximately $1,574,798. Of this amount, $644,541

is recorded in the General Fund in accrued wages for the amount expected to be utilized in the next fiscal year.

Note 8. Interfund Receivables, Payables, and Transfers

Interfund balances at August 31, 2016 arose in the normal course of operations and consisted of the following

individual fund receivable and payable balances:

TO FROM

General Fund Special Revenue Fund 6,510,790$

General Fund Internal Service Funds 718,079

Total General Fund 7,228,869$

Capital Projects General Fund 9,242,820

Total Capital Projects 9,242,820

Internal Service Funds General Fund 13,090

Total Internal Service Funds 13,090

Agency Funds General Fund 676

Agency Funds Special Revenue Fund 759

Total Agency Funds 1,435

Total Due From Other Funds 16,486,214$

FROM TO

General Fund Capital Projects $9,242,820

General Fund Internal Service Funds 13,090

General Fund Agency Funds 676

Total General Fund $9,256,586

Special Revenue Fund General Fund 6,510,790

Special Revenue Fund Agency Funds 759

Total Special Revenue Fund 6,511,549

Internal Service Funds General Fund 718,079

Total Internal Service Funds 718,079

Total Due To Other Funds 16,486,214$

All due to/from amounts are generated in the normal course of operations from payroll and accounts payable

activity. They are repaid periodically throughout the year.

42




Note 8. Interfund Receivables, Payables, and Transfers – continued

Transfers In/Out for the year-ended August 31, 2016 were as follows:

Transfers In

General Capital Enterprise

Fund Projects Fund Transfers Out

FROM

General Fund -$ 9,242,820$ 429$ 9,243,249$

Motor Pool 21,546 21,546

Catering Services 41,464 - - 41,464

63,010$ 9,242,820$ 429$ 9,306,259$

In the fund financial statements, $9,242,820 was transferred out of the General Fund to Capital Projects Fund

for the acquisition of equipment or for renovations. $429 was transferred out of the General Fund into the

Enterprise Fund to dissolve the Enterprise Fund, as the District outsourced concession operations beginning in

August 2015. Vehicles with a net book value of $21,546 were transferred from the motor pool to the General

Fund. $41,464 was transferred from the Catering Internal Service Fund to the General Fund to finalize the

dissolution of the Catering Internal Service Fund.

Note 9. Local Revenues - Governmental Funds

Local revenues are comprised of the following:

Debt Special

General Service Capital Revenue

Fund Fund Projects Fund Total

Taxes, penalty & interest 147,077,843$ 44,135,422$ 191,213,265$

Other intermediate 2,456,802 4,842,383$ 7,299,185

Food service 7,729,332 7,729,332

Investment earning 596,619 30,298 515,486$ 46,111 1,188,514

Total 150,131,264$ 44,165,720$ 515,486$ 12,617,826$ 207,430,296$

Note 10. Risk Management

Workers’ Compensation – Self Funded

The District manages its workers’ compensation risk internally through a Risk Management Department which

provides for loss control and loss prevention and sets aside assets for claim settlement through the Risk

Management Internal Service Fund. This internal service fund charges interfund “premiums” based on an

estimate of the District’s ultimate loss.

During the year ended August 31, 2016, the District met its statutory workers’ compensation obligations by

participating as a self-funded member of the Texas Association of School Boards (TASB) Risk Management

Fund (Fund). The Fund was created and is operated under the provisions of the Interlocal Cooperation Act,

Chapter 791 of the Texas Government Code and Chapter 504, Texas Labor Code. All members participating

in the Fund execute Interlocal Agreements that define the responsibilities of the parties.

As a self-funded member of the TASB Fund, the District is solely responsible for all claim costs, both reported

and unreported. The Fund provides administrative services to its self-funded members including claims

administration and customer service.

43




Note 10. Risk Management - continued

The District is protected against higher than expected claims cost through the purchase of stop-loss coverage.

Through Frost Insurance, the District has workers’ compensation stop-loss coverage with Midwest Employers

Casualty Company with a $750,000 deductible per occurrence and no aggregate loss coverage limit for claims

incurred while self-insured.

The TASB Fund engages services of an independent auditor to conduct a financial audit after the close of each

plan year on August 31. The audit is accepted by the TASB Fund’s Board of Trustees in February of the

following year. The TASB Fund’s audited financial statements as of August 31, 2016, are available at the

TASB offices and have been filed with the Texas Department of Insurance in Austin.

Health Insurance

As of September 1, 2011, the District discontinued the health self-insurance plan. At that time, employees

became eligible to purchase health insurance through TRS-ActiveCare, which is the statewide health plan for

public education employees established by the 77th Texas Legislature. It is a fully insured plan administered

by Aetna. The District contributes $325 per active participant.

For workers’ compensation, health care, property, and liability insurances, the District has not experienced

significant reductions in insurance coverage from that of the prior year. With respect to the risks mentioned

below, settlements have not exceeded insurance coverage for the past three fiscal years.

The District reports liabilities based on requirements of Governmental Auditing Standards Board Statement

Nos. 10 and 30, which require a liability for claims be reported if information prior to the issuance of the

financial statements indicates it is probable a loss has occurred and the amount of that loss can be reasonably

estimated. Liabilities include an amount for claims that have been incurred but not reported. Because actual

claims liabilities depend on such complex factors as inflation, changes in legal doctrines, and damage awards,

the process used in computing claims liability does not necessarily result in an exact amount. Claims liabilities

are reevaluated periodically to take into consideration recently settled claims, the frequency of claims, and other

economic and social factors. This liability for workers’ compensation self-funded plans, reported at their

estimated value on August 31, 2016, was $3,023,647 and is recorded as an accrued expenditure in the Risk

Management Internal Service Fund.

In fiscal years 2016 and 2015, changes in workers’ compensation claims liability amounts were:

Internal Service Fund

Beginning of

Fiscal Year

Liability

Current Year

Claims and

Changes in

Estimates

Claim

Payments

Balance at

Fiscal Year End

2015 - Risk Management 3,675,767 1,315,008 (1,469,148) 3,521,627

2016 - Risk Management 3,521,627 557,722 1,055,702 3,023,647

At August 31, 2016, the District held $8,876,678 in temporary cash and investments in the Risk Management

Internal Service Fund designated for payment of workers’ compensation.

44




Note 10. Risk Management - continued

Property and Liability Insurance

The District’s buildings are insured through purchased insurance to replacement cost except from wind/hail

which is insured for actual cash value. The deductible is $100,000 per occurrence. The District’s vehicles are

insured through purchased insurance for liability up to $300,000 per occurrence, which meets the District’s tort

liability limits, plus $1,000,000 per occurrence for out of state claims. Vehicle physical damage and liability is

subject to a $2,500 deductible.

The District maintains Educator Leaders liability coverage with a $1,000,000 limit and per occurrence

deductible of $10,000. The District also has a crime insurance policy with a $1,000,000 limit and a $10,000

deductible. The District maintains a general liability coverage with a $1,000,000 limit and a per occurrence

deductible of $10,000 and an annual aggregate of $2,000,000.

The Texas Commission on Environmental Quality (“TCEQ”) has required that the District have liability

insurance or self-insurance to protect against loss from operating underground fuel storage tanks. The amount

of insurance required by the TECQ is $1,000,000 per incident or $2,000,000 in the annual aggregate. The

Board of Trustees has decided to satisfy this insurance requirement by designating $2,000,000 of the District’s

General Fund Balance as a self-insurance fund.

The City of Garland has required that the District provide proof of liability insurance or self-insurance in the

total amount of $6,000,000 ($1,000,000 primary and $5,000,000 self-insurance) in order to use City of Garland

right of ways for the District’s WAN/MAN fiber optic communications cables. The purpose of the insurance

is to cover any future possible claims of liability arising out of the construction, installation, maintenance, or

operation of the District’s WAN/MAN cables in the City of Garland rights of way. The Board of Trustees has

decided to satisfy this insurance requirement by designating self-insurance of $6,000,000 of the District’s

General Fund Balance as a self-insurance fund.

Note 11. Retirement Plan

Retirement Plan Description

The District participates in a cost-sharing multi-employer defined benefit pension that has a special funding

situation. The plan is administered by the Teacher Retirement System of Texas (“TRS”). TRS’s defined benefit

pension plan is established and administered in accordance with the Texas Constitution, Article XVI, Section

67 and the Texas Government Code, Title 8, Subtitle C. The pension trust fund is a qualified pension trust under

Section 401(a) of the Internal Revenue Code. The Texas Legislature establishes benefits and contribution rates

within the guidelines of the Texas Constitution. The pension’s Board of Trustees does not have the authority

to establish or amend benefit terms.

All employees of public, state-support educational institutions in Texas who are employed for one-half or more

of the standard work load and who are not exempted from membership under Texas Government Code, Title

8, Section 822.002 are covered by the system.

Pension Plan Fiduciary Net Position

Detail information about the Teacher Retirement System’s fiduciary net position is available in a separately-

issued Comprehensive Annual Financial Report that includes financial statements and required

supplementary information. That report may be obtained on the Internet at

http://www.trs.state.tx.us/about/documents/cafr.pdf#CAFR; by writing to TRS at 1000 Red River Street,

Austin, TX, 78701-2698; or by calling (512) 542-6592.

45

http://www.trs.state.tx.us/about/documents/cafr.pdf#CAFR




Note 11. Retirement Plan - continued

Benefits Provided

TRS provides service and disability retirement, as well as death and survivor benefits, to eligible employees

(and their beneficiaries) of public and higher education in Texas. The pension formula is calculated using 2.3

percent (multiplier) times the average of the five highest annual creditable salaries time years of credited service

to arrive at the annual standard annuity except for members who are grandfathered, the three highest annual

salaries are used. The normal service retirement is at age 65 with 5 years of credited service or when the sum

of the member’s age and years of credited service equals 80 or more years. Early retirement is at age 55 with 5

years of service credit or earlier than 55 with 30 years of service credit. There are additional provisions for early

retirement if the sum of the member’s age and years of service credit total at least 80, but the member is less

than age 60 or 62 depending on date of employment, or if the member was grandfathered in under a previous

rule. There are no automatic post-employment benefit changes; including automatic cost-of-living adjustments

(“COLAs”). Ad hoc post-employment benefit changes, including ad hoc COLAs can be granted by the Texas

Legislature as noted in the plan Description.

Contributions

Contribution requirements are established or amended pursuant to Article 16, section 67 of the Texas

Constitution which requires the Texas legislature to establish a member contribution rate of not less than 6%

of the member’s annual compensation and a state contribution rate of not less than 6% and not more than 10%

of the aggregate annual compensation paid to members of the system during the fiscal year. Texas Government

Code Section 821.006 prohibits benefit improvements, if as a result of the particular action, the time required

to amortize TRS’ unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or, if the

amortization period already exceeds 31 years, the period would be increased by such action.

Employee contribution rates are set in state statute, Texas Government Code 825.402. Senate Bill 1458 of the

83rd Texas Legislature amended Texas Government Code 825.402 for member contributions and established

employee contribution rates for fiscal years 2014 thru 2017.

The 83rd Texas Legislature, General Appropriations Act (GAA) established the employer contribution rates for

fiscal years 2015 and 2016. The 84th Texas Legislature, General Appropriations Act (GAA) established the

employer contribution rates for fiscal years 2016 and 2017.

2015 2016

Member 6.7% 7.2%

Employer 6.8% 6.8%

District 6.8% 6.8%

Contribution Rates

Plan Fiscal Year

Contributors to the plan include members, employers and the State of Texas as the only non-employer

contributing entity. The State contributes to the plan in accordance with state statutes and the GAA.

Contributions and pension expense for all contributors were as follows:

Contributions

Required and

Made

Pension

Expense

TRS

Contributions

Made During

Fiscal Year

Member (Employee) 22,485,878$ $ - 24,545,648$

Non-employer contributing agency (State) 17,020,035 28,941,819 17,102,506

District 9,926,491 19,186,184 10,403,722

Measurement Year

46





As the non-employer contributing entity for public education and junior colleges, the State of Texas contributes

to the retirement system an amount equal to the current employer contribution rate times the aggregate annual

compensation of all participating members of the pension trust fund during that fiscal year reduced by the

amounts described below which are paid by the employers. Employers (public school, junior college, other

entities or the State of Texas as the employer for senior universities and medical schools) are required to pay

the employer contribution rate in the following instances:

On the portion of the member’s salary that exceeds the statutory minimum for members entitled to the

statutory minimum under Section 21.402 of the Texas Education Code.

During a new member’s first 90 days of employment.

When any part or all of an employee’s salary is paid by federal funding sources, a privately sponsored

source, from non-educational and general, or local funds.

When the employing district is a public junior college or junior college district, the employer shall

contribute to the retirement system an amount equal to 50% of the state contribution rate for certain

instructional or administrative employees; and 100% of the state contribution rate for all other

employees.

In addition to the employer contributions listed above, there are two additional surcharges an employer is

subject to.

When employing a retiree of the Teacher Retirement System the employer shall pay both the member

contribution and the state contribution as an employment after retirement surcharge.

When a school district or charter school does not contribute to the Federal Old-Age, Survivors and

Disability Insurance (OASDI) Program for certain employees, they must contribute 1.5% of the state

contribution rate for certain instructional or administrative employees; and 100% of the state

contribution rate for all other employees.

Actuarial Assumptions

The total pension liability in the August 31, 2015 actuarial valuation was determined using the following

actuarial assumptions:

Valuation Date August 31, 2015

Actuarial Cost Method Individual Entry Age Normal

Asset Valuation Method Market Value

Discount Rate 8.00%

Long-term Expected Investment Rate of Return 8.00%

Salary Increases 3.5% to 9.5%

Payroll Growth Rate 2.5%

Inflation 2.5%

Benefit Changes During the Year None

Ad Hoc Post- Employment Benefit Changes None

The actuarial methods and assumptions are primarily based on a study of actual experience for the four year

period ending August 31, 2014 and adopted on September 24, 2015.

47





Discount Rate

The discount rate used to measure the total pension liability was 8.0%. There was no change in the discount

rate since the previous year. The projection of cash flows used to determine the discount rate assumed that

contributions from plan members and those of the contributing employers and the non-employer contributing

entity are made at the statutorily required rates. Based on those assumptions, the pension plan’s fiduciary net

position was projected to be available to make all future benefit payments of current plan members. Therefore,

the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit

payments to determine the total pension liability. The long-term rate of return on pension plan investments is

8%. The long-term expected rate of return on pension plan investments was determined using a building-block

method in which best-estimates ranges of expected future real rates of return (expected returns, net of pension

plan investment expense and inflation) are developed for each major asset class. These ranges are combined to

produce the long-term expected rate of return by weighting the expected future real rates of return by the target

asset allocation percentage and by adding expected inflation.

Best estimates of geometric real rates of return for each major asset class included in the Systems target asset

allocation as of August 31, 2015 are summarized below:

Target

Allocation

Real Return

Geometric

Basis

Long-Term

Expected

Portfolio Real

Rate of

Return*

Global Equity

U.S. 18% 4.6% 1.0%

Non-U.S. Developed 13% 5.1% 0.8%

Emerging Markets 9% 5.9% 0.7%

Directional Hedge Funds 4% 3.2% 0.1%

Private Equity 13% 7.0% 1.1%

Stable Value

U.S. Treasuries 11% 0.7% 0.1%

Absolute Return 0% 1.8% 0.0%

Stable Value Hedge Funds 4% 3.0% 0.1%

Cash 1% -0.2% 0.0%

Real Return

Global Inflation Linked Bonds 3% 0.9% 0.0%

Real Assets 16% 5.1% 1.1%

Energy and Natural Resources 3% 6.6% 0.2%

Commodities 0% 1.2% 0.0%

Risk Parity

Risk Parity 5% 6.7% 0.3%

Inflation Expectation 2.2%

Alpha 1.0%

Total 100% 8.7%

Asset Class

The Expected Contribution to return incorporates the volatility drag resulting from the conversion

between Arithmetic and Geometric mean returns.

48





Discount Rate Sensitivity Analysis

The following schedule shows the impact of the Net Pension Liability if the discount rate used was 1% less

than and 1% greater than the discount rate that was used (8%) in measuring the 2015 Net Pension Liability.

1% Decrease

7%

Current

Discount Rate

8%

1% Increase

9%

District’s proportional share

of the net pension liability

$ 185,669,625

$ 118,501,570

$ 62,554,755

Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources

Related to Pensions

At August 31, 2016, the District reported a liability of $118,501,570 for its proportionate share of the TRS’s

net pension liability. This liability reflects a reduction for State pension support provided to the District. The

amount recognized by the District as its proportionate share of the net pension liability, the related State support,

and the total portion of the net pension liability that was associated with the District were as follows:

District’s proportional share of the net pension liability $ 118,501,570

State’s proportional share of the net pension liability associated with the district 203,123,426

Total $321,624,996

The net pension liability was measured as of August 31, 2015 and the total pension liability used to calculate

the net pension liability was determined by an actuarial valuation as of that date. The employer’s proportion of

the net pension liability was based on the employer’s contributions to the pension plan relative to the

contributions of all employers to the plan for the period September 1, 2014 thru August 31, 2015.

At August 31, 2015 the employer’s proportion of the collective net pension liability was 0.3352% which was

substantially the same from its proportion measured as of August 31, 2014 of 0.2153%.

Changes since the Prior Actuarial Valuation

The following are changes to the actuarial assumptions or other inputs that affected measurement of the total

pension liability since the prior measurement period:

New actuarial assumptions were adopted by the Teacher Retirement System of Texas’ Board of Trustees on

September 24, 2015 and are effective with this valuation as of August 31, 2015. The major assumptions changes

were the adoption of the use of generational mortality for the purpose of predicting future mortality

improvement and the reduction in the inflation rate from 3.00% to 2.50%.

There were no changes of benefit terms that affected measurement of the total pension liability during the

measurement period.

For the year ended August 31, 2016, the District recognized pension expense of $19,186,184 as well as revenue

of $28,941,819 representing pension expense incurred by the State on behalf of the District.

49





At August 31, 2016, the District reported its proportionate share of the TRS’s deferred outflows of resources

and deferred inflows of resources related to pensions from the following sources:

Deferred

Outflows

Of Resources

Deferred

Inflows of

Resources

Differences between expected and actual experience $ 739,919 $ (4,554,121)

Changes of assumptions 3,109,901 (4,227,617)

Net difference between projected and actual earnings on pension

plan investments 15,997,208

Changes in proportion and differences between District

contributions and proportionate share of contributions 27,676,971

(12,542)

District contributions subsequent to the measurement date 10,403,722 -

Total $ 57,927,721 $ (8,794,280)

The $10,403,722 reported as deferred outflows of resources related to pensions resulting from District

contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability

in the year ended August 31, 2017. The net amounts of the employer’s balances of deferred outflows and

inflows of resources related to pensions will be recognized in pension expense as follows:

Year ended

August 31 Amount

2017 ($6,878,069)

2018 (6,878,069)

2019 (6,878,069)

2020 (11,273,766)

2021 (3,931,555)

2022 (2,890,192)

50




Note 12. Retiree Health Plan

Plan Description

The District contributes to the Texas Public School Retired Employees Group Insurance Program (TRS-Care),

a cost-sharing multiple-employer defined benefit post-employment health care plan administered by the

Teacher Retirement System of Texas (“TRS”). TRS-Care Retired Plan provides health care coverage for certain

persons (and their dependents) who retired under the TRS. The statutory authority for the program is Texas

Insurance Code, Chapter 1575. Section 1575.052 grants the TRS Board of Trustees the authority to establish

and amend basic and optional group insurance coverage for participants. TRS issues a publicly available

financial report that includes financial statements and required supplementary information for TRS-Care. The

report may be obtained by visiting the TRS web site at www.trs.state.tx.us under the TRS Publications heading,

by calling the TRS Communication Department at 1-800-223-8778, or by writing to the TRS Communications

Department at 1000 Red River Street, Austin, Texas 78701.

Funding Policy

Contribution requirements are not actuarially determined but are legally established each biennium by the Texas

Legislature. Texas Insurance Code, Sections 1575.202, 203 and 204 establish state, active employee, and public

school contributions, respectively. The State of Texas contribution rate was 1.00% of public school payroll for

the period September 2013 through June 2015, 0.50% for the period September 2012 through August 2013,

and 1.00% for the period July 2012 through August 2012.Active public school employee contribution rates

were 0.65% of public school payroll, with school districts contributing a percentage of payroll set at 0.55% for

fiscal years 2015, 2014, and 2013. Per Texas Insurance Code, Chapter 1575, the public school contribution

may not be less than 0.25% or greater than 0.75%of the salary of each active employee of the public school.

For staff members funded by federal programs, the federal programs are required to contribute 1.00%. The

District contributed 100% of the annual required contribution for fiscal year 2015, 2014, and 2013.

Contributions made by the State, District and staff members for the fiscal years ended August 31 2016, 2015,

and 2014, are as follows:

State TRS CARE

Contributions

Made on Behalf

of the District

District

Required

Contributions

to TRS Care

Staff

Members’

Contributions

to TRS CARE

District’s

Covered

Payroll

2016 $3,220,236 $2,128,408 $2,241,855 $344,899,599

2015 3,140,961 2,028,920 2,181,445 335,610,115

2014 3,030,964 1,991,034 2,093,784 322,119,883

For the current fiscal year and each of the past two years, the District’s actual contributions were equal to

100% of the required contributions. The contributions made by the State on behalf of the District have been

recorded in the governmental funds financial statements of the District as both state revenues and payroll

expenditures. These contributions are the legal responsibility of the State.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established prescription drug

coverage for Medicare beneficiaries know as Medicare Part D. Under Medicare Part D, TRS-Care receives

retiree drug subsidy payments from the federal government to offset certain prescription drug expenditures

for eligible TRS-Care participants. For the years June 30, 2016, 2015, and 2014, the subsidy payments received

by TRS-Care on-behalf of the District are as follows:

Fiscal

Year

Medicare

Part D

2016 $ 1,324,284

2015 1,436,082

2014 884,400

51

http://www.trs.state.tx.us/




Note 13. Commitments and Contingencies

Litigation – The District is the defendant in a number of lawsuits arising principally in the normal course of

operations. In the opinion of District’s management, the potential losses after insurance coverage, on all claims,

will not have a material adverse effect on the District’s financial statements.

Grant Programs – The District participates in numerous state and federal grant programs which are governed

by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are

subject to audit and adjustment by the grantor agencies. Therefore, to the extent the District has not complied

with the rules and regulations governing the grants, refunds of any monies received may be required and the

collectability of any related receivable at August 31, 2016 may be impaired. In the opinion of the District, there

are no significant contingent liabilities relating to compliance with the rules and regulations governing the

respective grants. Therefore, no provision has been recorded in the accompanying financial statements for such

contingencies.

Note 14. Operating Leases

The District leases a warehouse and clinic space under non-cancelable operating leases. Total lease payments

made under the warehouse and clinic leases were $108,075 and $78,821, respectfully, for the year ended

August 31, 2016.

The future minimum lease payments for the leases are as follows:

Year Ending August 31, Warehouse Clinic

2017 108,075 78,821

2018 108,075 78,821

2019 108,075 78,821

2020 108,075 39,411

2021 90,063 -

Total 522,363$ 275,874$

Note 15. Capital Leases

In August 2016, the District terminated its capital lease for copier equipment and did not exercise the bargain

renewal option. The equipment under capital lease and capital lease liability were written off resulting in a

loss on termination of $124,556.

In August 2016, the District entered into capital lease agreements for copier equipment. The agreement

expires in August 2019 and contain bargain renewal options up to an additional three years. Amortization of

the capital lease assets is included in depreciation expense within the Copier Pool Internal Service fund.

The following is a summary of the leased assets included in furniture and equipment within the Copier Pool

Internal Service Fund:

Equipment 3,636,975$

Less: accumulated depreciation (259,784)

Net book value 3,377,191$

52




Note 15. Capital Leases- continued

Future minimum commitments under the capital leases are as follows:

Fiscal Year Principal Interest Total

2017 700,784$ 84,590$ 785,374$

2018 718,865 66,510 785,375

2019 737,411 47,963 785,374

2020 597,513 30,787 628,300

2021 485,790 16,850 502,640

2022 396,612 5,499 402,111

Total 3,636,975$ 252,199$ 3,889,174$

Note 16. Deferred Outflows of Resources

For governmental activities, the unrestricted net position of $89,707,167 includes the effect of deferring the

recognition of losses on bond refundings. The $18,520,152 balance of the deferred outflow of resources at

August 31, 2016 will be recognized as an expense and will decrease unrestricted net position over the next 16

years.

September 1, New Obligations August 31,

2015 Obligations Retired or 2016

Balance Incurred Transferred Balance

Deferred Outflows of Resources:

Deferred charge on refunding 18,446,117$ 2,595,627$ 2,521,592$ 18,520,152$

Total Deferred Outflows of Resources 18,446,117$ 2,595,627$ 2,521,592$ 18,520,152$

Note 17. Subsequent Events

In October, 2016, the District issued $150,250,000 of Unlimited Tax School Building Bonds, Series 2016 for

the construction, renovation, acquisition and equipment of school buildings.

On December, 20 2016, Dr. Bob Morrison announced his retirement and resignation as Superintendent of

Schools for the District. On December 27, 2016, the Board of Trustees selected Dr. Deborah Cron as Interim

Superintendent of Schools.

The District evaluated all subsequent events through January 18, 2017, the date these financial statements

were issued, and determined there to be no additional subsequent events requiring recognition or disclosure.

53

Required Supplementary Information

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit G-1

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE

BUDGET AND ACTUAL – GENERAL FUND


The accompanying note is an integral part of the required supplemental information

Variance With

Budgeted Amounts Final Budget

Actual Amounts Positive or

ORIGINAL FINAL (GAAP BASIS) (Negative)

REVENUES:

5700 Total Local and Intermediate Sources 153,506,705$ 149,302,056$ 150,131,264$ 829,208$

5800 State Program Revenues 300,762,178 306,676,657 312,429,563 5,752,906

5900 Federal Program Revenues 800,000 5,481,833 6,331,153 849,320

5020 Total Revenues 455,068,883 461,460,546 468,891,980 7,431,434

EXPENDITURES:

Current:

0011 Instruction 267,075,609 268,150,545 270,394,819 (2,244,274)

0012 Instructional Resources and Media Services 7,750,378 7,992,052 7,783,675 208,377

0013 Curriculum and Instructional Staff Development 10,301,623 10,664,282 9,834,212 830,070

0021 Instructional Leadership 9,149,716 9,117,523 8,064,679 1,052,844

0023 School Leadership 29,648,079 29,925,112 29,669,102 256,010

0031 Guidance, Counseling, and Evaluation Services 21,861,175 22,739,236 22,006,584 732,652

0032 Social Work Services 1,256,754 1,365,345 964,173 401,172

0033 Health Services 6,890,515 6,954,911 6,616,875 338,036

0034 Student (Pupil) Transportation 13,720,802 13,350,274 12,575,365 774,909

0035 Food Services 300,000 402,214 361,717 40,497

0036 Cocurricular/Extracurricular Activities 7,524,770 8,057,178 7,844,771 212,407

0041 General Administration 16,413,822 15,513,219 14,710,560 802,659

0051 Facilities Maintenance and Operations 40,204,764 39,083,381 37,897,379 1,186,002

0052 Security and Monitoring Services 6,574,843 6,393,860 6,037,386 356,474

0053 Data Processing Services 12,113,966 12,165,966 10,722,503 1,443,463

0061 Community Services 2,023,220 2,387,198 2,110,411 276,787

Debt Service:

0071 Debt Service - Principal on Long-Term Debt 285,000 - -

Capital Outlay:

0081 Facilities Acquisition and Construction 10,000 168,500 117,342 51,158

Intergovernmental:

0095 Payments to Juvenile Justice Alternative Ed Program 75,000 75,000 30,168 44,832

0099 Other Intergovernmental Charges 700,000 700,000 692,137 7,863

6030 Total Expenditures 453,880,036 455,205,796 448,433,858 6,771,938

1100 Excess of Revenues Over Expenditures 1,188,847 6,254,750 20,458,122 14,203,372


7912 Sale of Real and Personal Property 338,003 335,475 (2,528)

7915 Transfers In 63,010 63,010


8911 Transfers Out (9,250,000) (9,250,000) (9,243,249) 6,751

7080 Total Other Financing Uses (9,250,000) (8,911,997) (8,842,235) 69,762

1200 Net Change in Fund Balances (8,061,153) (2,657,247) 11,615,887 14,273,134

0100 Fund Balance - September 1 (Beginning) 160,417,227 160,417,227 160,417,227 -

3000 Fund Balance - August 31 (Ending) 152,356,074$ 157,759,980$ 172,033,114$ 14,273,134$

54

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit G-2


BUDGET AND ACTUAL – NATIONAL BREAKFAST AND LUNCH PROGRAM


The accompanying note is an integral part of the required supplemental information

Variance With

Budgeted Amounts Final Budget

Actual Amounts Positive or


REVENUES:

5700 Total Local and Intermediate Sources 8,768,000$ 8,768,000$ 7,831,514$ (936,486)$

5800 State Program Revenues 155,000 155,000 310,941 155,941

5900 Federal Program Revenues 21,869,778 22,641,006 23,218,387 577,381

5020 Total Revenues 30,792,778 31,564,006 31,360,842 (203,164)

EXPENDITURES:

Current:

0035 Food Services 30,327,999 30,327,999 29,558,640 769,359

0051 Facilities Maintenance and Operations 444,500 444,500 48,405 396,095

6030 Total Expenditures 30,772,499 30,772,499 29,607,045 1,165,454

1100 Excess of Revenues Over Expenditures 20,279 791,507 1,753,797 962,290

OTHER FINANCING SOURCES:

7912 Sale of Real and Personal Property - 35,786 35,787 1

7080 Total Other Financing Sources - 35,786 35,787 1

1200 Net Change in Fund Balances 20,279 827,293 1,789,584 962,291


3000 Fund Balance - August 31 (Ending) 2,773,828$ 3,580,842$ 4,543,133$ 962,291$

55


NOTE TO REQUIRED SUPPLEMENTAL INFORMATION


Note 1. Stewardship, Compliance, and Accountability

The District is required by state law to adopt annual budgets for the General Fund, National School Lunch

and Breakfast Program and Debt Service Fund. Special Revenue Funds, other than the Food Service Fund,

are required to be budgeted on a project basis. Each budget is presented on the modified accrual basis of

accounting which is consistent with accounting principles generally accepted in the United States of America.

The District uses the following procedures in establishing the budgets reflected in the financial statements:

Prior to August 20th of the preceding fiscal year, the District prepares a budget for the next succeeding fiscal

year beginning September 1. The operating budget includes proposed expenditures and means of financing

them. A meeting of the Board of School Trustees is then called for the purpose of adopting the proposed

budget after ten days public notice of the meeting has been given. Prior to September 1, the budget is legally

enacted by the Board of School Trustees.

The officially adopted district budget, as amended, must be filed with TEA through PEIMS (Public Education

Information Management System) by the date prescribed in the annual system guidelines. This requirement

for filing the amended budget with TEA is satisfied when the school district files its Annual Financial and

Compliance Report.

Once a budget is approved, it can be amended at the function and fund level only by approval of a majority of

the members of the Board of School Trustees. Amendments are presented to the Board at their regular

meetings. Each amendment must have Board approval. Such amendments are made before the fact, are

reflected in the official minutes of the Board, and are not made after fiscal year-end as dictated by law.

Each budget is prepared and controlled by the Budget Director at the revenue and expenditure function/object

level. Budgeted amounts are as amended by the Board of School Trustees. All budget appropriations lapse at

year-end.

Over the course of the year, the District recommended, and the Board approved, several revisions to budgeted

revenue and appropriations. These amendments fall into the following categories:

Amendments approved shortly after the beginning of the new fiscal year for amounts reserved and

designated in the prior year

Amendments approved shortly after the beginning of the new fiscal year to align the payroll budget with

job assignment changes

Amendments in summer to revise estimates for local and state revenue based on the latest information on

student attendance numbers and tax collections

Amendments throughout the year for transfers to and from other funds and federal indirect cost calculations

Amendments during the year for changes in programs

Differences between the original and the final amended budget can be briefly summarized as follows:

56


NOTE TO REQUIRED SUPPLEMENTAL INFORMATION


Note 1. Stewardship, Compliance, and Accountability – continued

GENERAL FUND

Revenues

$4,204,649 decrease in local revenues to align budget with estimated year end totals and

also as a result of the increase to the homestead exemption from $15,000 to $25,000 as

approved by voters in the November 2015 election.

$5,914,479 increase in state program revenues to align budget with estimated year end

totals and also as a result of the increase to the homestead exemption from $15,000 to

$25,000 as approved by voters in the November 2015 election.

$4,681,833 increase in Federal Medicaid program revenues to align budget with estimated

year end totals.

Expenditures and Transfers Out

$1,074,936 increase in instruction expenditures to align budget with estimated year end

totals.

$878,061 increase in guidance, counseling and evaluation expenditures to align budget with

year-end totals.

$370,528 decrease in student transportation expenditures to align budget with estimated

year end totals.

$532,408 increase in extracurricular activities expenditures to align budget with year-end

totals.

$900,603 decrease in general administration expenditures to align budget with estimated

year end totals.

$1,121,383 decrease in plant maintenance and operations to align budget with estimated

year end totals.

After appropriations were amended as described above, actual revenues were $7,431,434 greater

than final budgeted amounts due to more revenue in state and federal programs than final budgeted

estimates. Actual expenditures were $6,771,943 less than final budget amounts due to year end

payroll accrual and non payroll expenses being less than estimated. Year end revenues were greater

than expenditures, thus adding to existing fund balance.

For the year ended August 31, 2016, expenditures exceeded appropriations in the following fund and

function (the aggregate level of control). Those over expenditures were funded by less than

anticipated expenditures in other functions or fund balance in the appropriate fund.

General Fund

Excess of

Expenditures

over

Appropriations

Instruction 2,244,274$

2,244,274$

NATIONAL BREAKFAST AND LUNCH PROGRAM

Revenues

$771,228 increase in federal revenue sources to align revenue budget with estimated year

end totals.

After appropriations were amended as described above, actual revenues were $203,164 less than

final budgeted amounts due to less revenue in local and intermediate sources than final budgeted

estimates. Actual expenditures were $1,165,454 less than final budget amounts due to the year-end

payroll accrual being less than estimated at the time the final amended budget was submitted to the

Board of Trustees for approval. Year end expenditures were less than revenue, thus increasing

existing fund balance.

57


TEACHER RETIREMENT SYSTEM OF TEXAS


Schedule of The District’s Proportionate Share of The Net Pension Liability Exhibit G-3

Last Two Measurement Years

2015 2014

District's proportion of the net pension liability 0.3352% 0.2153%

District's proportionate share of the net pension liability 118,501,570$ 57,527,611$

State's proportionate share of the net pension liability associated with the District 203,123,426 179,684,773

Total 321,694,996$ 237,212,384$

District's covered-employee payroll (for Measurement Year) 335,610,114$ 322,119,883$

District's proportionate share of the net pension liability as a percentage of it's covered-

employee payroll 35.3% 17.9%

Plan fiduciary net position as a percentage of the total pension liability * 78.43% 83.25%

Plan's net pension liability as a percentage of covered-employee payroll * 91.94% 72.89%

The amounts presented for each Plan year which ends the preceding August 31 of the

District's fiscal year.

Net pension liability is calculated using an new methodology and will be presented

prospectively in accordance with GASB 68.

* Per TRS' CAFR

Note: Data not available prior to 2014.

Schedule of The District’s Contributions- Last 6 Fiscal Years Exhibit G-4

2016 2015 2014 2013 2012 2011

Contractually required contributions 10,403,722$ 9,926,491$ 5,460,162$ 4,522,663$ 5,390,517$ 6,098,888$

Contributions in relation to the

contractual required contributions 10,403,722 9,926,491 5,460,162 4,522,663 5,390,517 6,098,888

Contribution deficiency (excess) -$ -$ -$ -$ -$ -$

District's covered employee payroll 344,899,599$ 335,610,114$ 322,119,883$ 309,585,629$ 305,756,789$ 315,564,945$

Contributions as a percentage of

covered employee payroll 3.01% 2.95% 1.70% 1.46% 1.76% 1.93%

Note: Data not available prior to 2011.

58


NOTE TO TEACHER RETIREMENT SYSTEM OF TEXAS


Effective September 1, 2014, employers who did not contribute Social Security for TRS-eligible employees

were required to contribute an additional 1.5% of TRS-eligible compensation which nearly doubled the

District’s contributions into the Plan. Because the District’s proportional share of the plan is determined by

its proportional share of contributions, the District recognized a corresponding increase in its share of net

pension liability.

Changes of Assumptions

New actuarial assumptions were adopted by the Teacher Retirement System of Texas’ Board of Trustees on

September 24, 2015 and are effective with the valuation as of August 31, 2015. The major assumptions

changes were the adoption of the use of generational mortality for the purpose of predicting future mortality

improvement and the reduction in the inflation rate from 3.00% to 2.50%.

Changes of Benefit Terms

There were no changes of benefit terms that affected measurement of the total pension liability during the

measurement period.

59

Combining Statements

INTERNAL SERVICE FUNDS

The Internal Service Funds are used to account for the financing of goods or services provided by one department to

other departments on a cost reimbursement basis. The departments included within these funds are as follows:

Motor Pool – this fund is used to account for costs associated with certain vehicles used to transport students

to/from co-curricular and extracurricular activities and staff to/from business-related activities.

Print Shop – this fund is used to account for printing services.

Risk Management – this fund is used to account for the costs associated with the workers’ compensation self-

funded program.

Copier Pool – this fund is used to account for the cost of copier rental.

Curtis Culwell Center – this fund is used to account for the operation of the Curtis Culwell Center.

Catering Services – this fund is used to record catering service costs for schools and various organizations

within the District. Operations of this fund were moved to the Student Nutrition Services fund beginning

September 1, 2015.

60


COMBINING STATEMENT OF NET POSITION


AUGUST 31, 2016

751 752 753

Motor Print Risk

Pool Shop Management

ASSETS

Current Assets:

Cash and Cash Equivalents 56,867$ 481,031$ 8,876,678$

Due From Other Funds

Other Receivables

Prepaid Items - 82,649 15,616

Total Current Assets 56,867 563,680 8,892,294

Noncurrent Assets:

Capital Assets:

Land Purchase and Improvements

Building and Building Improvements 7,720

Furniture and Equipment 528,042 1,727,313 149,336

Accumulated Depreciation - Other Land Improvements

Accumulated Depreciation - Building and

Building Improvements (3,474)

Accumulated Depreciation - Furniture and Equipment (357,687) (1,227,091) (134,422)

Total Noncurrent Assets 170,355 500,222 19,160

Total Assets 227,222 1,063,902 8,911,454

LIABILITIES

Current Liabilities:

Accounts Payable 31,840 11,281

Leases Payable

Interest Payable

Accrued Wages Payable 3,501 3,841

Due to Other Funds 9,047

Claims Liability 1,174,807

Unearned Revenues - - -

Total Current Liabilities - 44,388 1,189,929

Noncurrent Liabilities:

Capital Lease Payable Long-Term

Claims Liability Long-Term - - 1,848,840

Total Noncurrent Liabilities - - 1,848,840

Total Liabilities - 44,388 3,038,769

NET POSITION

Net Investment in Capital Assets 170,355 500,222 19,160

Unrestricted Net Position 56,867 519,292 5,853,525

Total Net Position 227,222$ 1,019,514$ 5,872,685$

61

Exhibit H-1

756 757 758 Total

Copier Curtis Catering Internal

Pool Culwell Center Services Service Funds

324,804$ 461,755$ -$ 10,201,135$

13,090 - 13,090

2,569 2,569

- 10,039 - 108,304

337,894 474,363 - 10,325,098

208,872 208,872

258,270 265,990

3,636,975 816,182 - 6,857,848

(68,419) (68,419)

(58,356) (61,830)

(259,784) (335,626) - (2,314,610)

3,377,191 820,923 - 4,887,851

3,715,085 1,295,286 - 15,212,949

27,230 95,843 - 166,194

700,784 - 700,784

7,729 - 7,729

20,670 28,012

709,032 718,079

1,174,807

- 233,208 - 233,208

735,743 1,058,753 - 3,028,813

2,936,191 - 2,936,191

- - - 1,848,840

2,936,191 - - 4,785,031

3,671,934 1,058,753 - 7,813,844

(259,784) 820,923 - 1,250,876

302,935 (584,390) - 6,148,229

43,151$ 236,533$ -$ 7,399,105$

62


COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION



751 752 753

Motor Print Risk


OPERATING REVENUES:

Local and Intermediate Sources 41,073$ 870,446$ 1,587,693$

Total Operating Revenues 41,073 870,446 1,587,693

OPERATING EXPENSES:

Payroll Costs 275,118 416,750

Professional and Contracted Services 119,059 73,778

Supplies and Materials 8,530 351,191 36,906

Other Operating Costs 23,876 147,704 573,135

Total Operating Expenses 32,406 893,072 1,100,569

Operating Income (Loss) 8,667 (22,626) 487,124

NONOPERATING REVENUES (EXPENSES):

Earnings from Temporary Deposits & Investments 13,037

Interest on Capital Lease

Loss on Termination of Capital Lease

Total Nonoperating Revenues (Expenses) - - 13,037

Income (Loss) before Transfers 8,667 (22,626) 500,161

Transfer Out (21,546)

Change in Net Position (12,879) (22,626) 500,161

Total Net Position - September 1 (Beginning) 240,101 1,042,140 5,372,524

Total Net Position - August 31 (Ending) 227,222 1,019,514$ 5,872,685$

63

Exhibit H-2

756 757 758 Total



919,107$ 2,450,366$ -$ 5,868,685$

919,107 2,450,366 - 5,868,685

1,030,754 1,722,622

450,956 1,441,022 2,084,815

334,115 730,742

441,958 267,561 - 1,454,234

892,914 3,073,452 - 5,992,413

26,193 (623,086) - (123,728)

13,037

(50,753) (50,753)

(124,556) (124,556)

(175,309) - - (162,272)

(149,116) (623,086) - (286,000)

(41,464) (63,010)

(149,116) (623,086) (41,464) (349,010)

192,267 859,619 41,464 7,748,115

43,151$ 236,533$ -$ 7,399,105$

64


COMBINING STATEMENT OF CASH FLOWS



751 752 753

Motor Print Risk


Cash Flows from Operating Activities:

Cash Received from User Charges 41,300$ -$ -$

Cash Received from Assessments - Other Funds 947,068 1,706,492

Cash Payments to Employees for Services (274,625) (425,736)

Cash Payments for Insurance Claims (1,051,425)

Cash Payments for Suppliers (8,530) (379,457) (45,256)

Cash Payments for Other Operating Expenses (523) (13,394)

Cash Payments for Prof. and Contracted Services - (119,059) (71,089)

Net Cash Provided by (Used for) Operating Activities 32,770 173,404 99,592

Cash Flows from Noncapital Financing Activities:

Transfers to Other Funds - - -

Net Cash Used for Noncapital Financing Activities - - -

Cash Flows from Capital Financing Activities:

Acquisition of Capital Assets (117,945) (51,710)

Capital Lease Payments

Capital Lease Interest Expense - -

Net Cash Used for Capital Financing Activities (117,945) (51,710) -

Cash Flows from Investing Activities:

Interest and Dividends on Investments - - 13,037

Net Increase (Decrease) in Cash and Cash Equivalents (85,175) 121,694 112,629

Cash and Cash Equivalents at Beginning of the Year: 142,042 359,337 8,764,049

Cash and Cash Equivalents at the End of the Year: 56,867$ 481,031$ 8,876,678$

Reconciliation of Operating Income (Loss) to Net Cash

Provided by (Used for) Operating Activities:

Operating Income (Loss): 8,667$ (22,626)$ 487,124$

Adjustments to Reconcile Operating Income to Net

Cash Provided by (Used for) Operating Activities:

Depreciation 23,876 147,181 6,296

Effect of Increases and Decreases in Current

Assets and Liabilities:

Decrease in Due from Other Funds 227 81,028 118,944

Increase in Other Receivables

(Increase) Decrease in Prepaid Items (54,362) 2,689

Increase (Decrease) in Accounts Payable 26,096 (8,350)

Increase (Decrease) in Accrued Wages Payable 493 (8,986)

Increase (Decrease) in Due to Other Funds (4,406) (145)

Increase in Unearned Revenue

Decrease in Claims Liability - (497,980)

Net Cash Provided by (Used for) Operating Activities 32,770$ 173,404$ 99,592$

Noncash Investing, Capital, and Financing Activities:

Borrowing Under Capital Lease

Transfer of Equipment to another Fund (21,546)

65

Exhibit H-3

756 757 758 Total



1,002,803$ 2,035,185$ -$ 3,079,288$

1,180,459 3,834,019

(1,026,381) (1,726,742)

(1,051,425)

(342,336) (775,579)

(86,568) (5,529) (106,014)

(502,840) (1,441,022) (2,134,010)

499,963 319,337 (5,529) 1,119,537

- - (41,464) (41,464)

- - (41,464) (41,464)

(169,655)

(428,317) (428,317)

(43,024) - - (43,024)

(471,341) - - (640,996)

- - - 13,037

28,622 319,337 (46,993) 450,114

296,182 142,418 46,993 9,751,021

324,804$ 461,755$ -$ 10,201,135$

26,193$ (623,086)$ -$ (123,728)$

441,958 180,993 800,304

83,696 283,895

(1,370) (1,370)

1,551 (50,122)

(51,884) (9,772) (43,910)

4,373 (4,120)

680,459 (5,529) 670,379

86,189 86,189

- (497,980)

499,963$ 319,337$ (5,529)$ 1,119,537$

3,636,975$ 3,636,975$

(21,546)$

66

AGENCY FUNDS

Agency funds are established to account for assets received and held by the District in the capacity of trustee, agent,

or custodian. Expenditures are made only in accordance with the purpose for which assets are received.

Student Activity Agency Fund accounts for the receipt and disbursement of monies from student activity

organizations.

Other Activity Agency Fund accounts for the receipt and disbursement of monies from employee activity

groups and fundraisers for outside charitable groups/scholarships.

67

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit H-4

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES

ALL AGENCY FUNDS


Balance Balance

September 1, August 31,

2015 Additions Deductions 2016

STUDENT ACTIVITY ACCOUNT

Assets:

Cash and Temporary Investments 923,781$ 5,010,992$ 5,556,121$ 378,652$

Total Assets 923,781 5,010,992 5,556,121 378,652

Liabilities:

Accounts Payable 14,478 2,118,733 2,120,458 12,753

Due to External Parties 509,003 4,813,708 5,322,711 -

Due to Student Groups 400,300 4,575,679 4,610,080 365,899

Total Liabilities 923,781 11,508,120 12,053,249 378,652

OTHER ACTIVITY FUND

Assets:

Cash and Temporary Investments 491,574 2,935,451 3,254,410 172,615

Due from External Parties 17,959 1,177,818 1,194,342 1,435

Total Assets 509,533 4,113,269 4,448,752 174,050

Liabilities:

Accounts Payable 14,033 971,418 972,041 13,410


Due to Employee Groups 174,171 835,353 848,884 160,640

Total Liabilities 509,533 3,114,944 3,450,427 174,050

TOTAL AGENCY FUNDS

Assets:

Cash and Temporary Investments 1,415,355 7,946,443 8,810,531 551,267

Due from External Parties 17,959 1,177,818 1,194,342 1,435

Total Assets 1,433,314 9,124,261 10,004,873 552,702

Liabilities:

Accounts Payable 28,511 3,090,151 3,092,499 26,163


Due to Student/Employee Groups 574,471 5,411,032 5,458,964 526,539

Total Liabilities 1,433,314$ 14,623,064$ 15,503,676$ 552,702$

68

Required TEA Schedules Section


SCHEDULE OF DELINQUENT TAXES RECEIVABLE

FISCAL YEAR ENDED AUGUST 31, 2016

1 2 3 10

Net Assessed/Appraised Beginning

Last Ten Years Ended Value For School Balance

August 31 Maintenance Debt Service Tax Purposes 9/1/2015

2007 and prior various various various 1,182,177$

2008 1.3316 0.2133 13,594,127,982 157,039

2009 1.0400 0.2133 14,069,484,561 179,920

2010 1.0400 0.2133 13,652,343,413 215,644

2011 1.0400 0.2133 13,366,036,304 260,715

2012 1.0400 0.2133 13,085,564,669 340,564

2013 1.0400 0.2133 12,971,711,641 406,011

2014 1.0400 0.2133 13,064,995,612 563,778

2015 1.0400 0.2133 13,678,153,355 1,757,024

2016 1.0400 0.3133 14,001,530,407 -

1000 TOTALS 5,062,872$

Tax Rates

69

Exhibit J-1

20 31 32 40 50

Current Maintenance Debt Service Entire Ending

Year's Total Total Year's Balance

Total Levy Collections Collections Adjustments 8/31/2016

-$ 27,715$ 5,020$ (12,391)$ 1,137,051$

6,400 1,313 (1,631) 147,695

8,239 1,690 (1,606) 168,385

10,225 2,097 (986) 202,336

18,203 3,733 (65) 238,714

30,165 6,187 (28) 304,184

60,250 12,357 2,423 335,827

123,051 25,237 (12,156) 403,334

617,651 126,678 (332,685) 680,010

189,482,711 145,265,117 43,704,957 1,166,390 1,679,027

189,482,711$ 146,167,016$ 43,889,269$ 807,265$ 5,296,563$

70

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit J-2


BUDGET AND ACTUAL – DEBT SERVICE FUND

FOR THE FISCAL YEAR ENDED AUGUST 31, 2016

Data Variance With

Control Final Budget

Codes Actual Amounts Positive or


REVENUES:

5700 Total Local and Intermediate Sources 45,307,514$ 44,307,514$ 44,165,720$ (141,794)$

5800 State Program Revenues 11,403,527 12,403,527 13,255,162 851,635

5900 Federal Program Revenues 464,486 464,486 466,488 2,002

5020 Total Revenues 57,175,527 57,175,527 57,887,370 711,843

EXPENDITURES:

Current:

Debt Service:

0071 Debt Service-Principal on Long Term Debt 38,298,253 38,298,253 38,298,252 1

0072 Debt Service-Interest on Long Term Debt 21,209,207 21,213,207 20,492,629 720,578

0073 Debt Service-Bond Issuance Cost and Fees 100,000 520,000 434,984 85,016

6030 Total Expenditures 59,607,460 60,031,460 59,225,865 805,595

1100 Excess (Deficiency) of Revenues Over (Under) Expenditures (2,431,933) (2,855,933) (1,338,495) 1,517,438


7911 Refunding Bonds Issued - 40,600,000 40,560,000 (40,000)

7916 Premium on Issuance of Bonds 6,410,000 6,405,364 (4,636)


8940 Payment to Refunded bond Escrow Agent (47,300,000) (47,261,626) 38,374

7080 Total Other Financing Uses - (290,000) (276,992) 13,008

1200 Net Change in Fund Balances (2,431,933) (3,145,933) (1,615,487) 1,530,446


3000 Fund Balance - August 31 (Ending) 7,529,222$ 6,815,222$ 8,345,668$ 1,530,446$

Budgeted Amounts

71


NET POSITION BY COMPONENT

LAST TEN FISCAL YEARS (UNAUDITED)

STATISTICAL SECTION

This part of the Garland Independent School District’s comprehensive annual financial report presents detailed

information as a context for understanding what the information in the financial statements, note disclosures, and

required supplementary information says about the government’s overall financial health.

Financial Trends 73-86

These schedules contain trend information to help the reader understand how

the government’s financial performance and wellbeing have changed over time.

Revenue Capacity 87-90

These schedules contain information to help the reader assess the government’s

most significant local revenue source, the property tax.

Debt Capacity 91-93

These schedules present information to help the reader assess the affordability

of the government’s current levels of outstanding debt and the government’s

ability to issue additional debt in the future.

Demographic and Economic Information 94-95

These schedules offer demographic and economic indicators to help the reader

understand the environment within which the government’s financial activities

take place.

Operating Information 96-107

These schedules contain service and infrastructure data to help the reader

understand how the information in the government’s financial report relates to

the services the government provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual

financial reports for the relevant year.

72


NET POSITION BY COMPONENT


2007 2008 2009 2010

Governmental net position

Net investment in capital assets 98,260,626$ 111,899,974$ 115,842,801$ 119,473,529$

Restricted

Food Service 2,417,197 1,406,758 1,032,266 2,237,555

Debt Service 2,662,244 1,590,931 2,867,279 4,692,604

Grant Funds

Construction

Unrestricted 107,501,931 89,688,303 95,328,280 99,789,458

Total governmental net position 210,841,998 204,585,966 215,070,626 226,193,146

Business-type net position

Net investment in capital assets 7,014 31,235 25,810 21,673

Unrestricted 14,670 (60,544) (78,527) (138,885)

Total Business-type net position 21,684 (29,309) (52,717) (117,212)

Total net position

Net investment in capital assets 98,267,640 111,931,209 115,868,611 119,495,202

Restricted

Food Service 2,417,197 1,406,758 1,032,266 2,237,555

Debt Service 2,662,244 1,590,931 2,867,279 4,692,604

Grant Funds

Construction

Unrestricted 107,516,601 89,627,759 95,249,753 99,650,573

Total net position 210,863,682$ 204,556,657$ 215,017,909$ 226,075,934$

Fiscal Year

Source: The Statement of Net Position for the Garland Independent School District

73

Exhibit S-1

2011 2012 2013 2014 2015 2016

135,714,399$ 150,416,165$ 157,656,333$ 162,891,590$ 173,975,555$ 186,102,148$

3,572,158 5,647,011 2,753,549 4,543,133

5,944,130 5,852,827 5,689,844 5,841,400 9,556,908 8,043,823

4,480,338 7,594,789 9,155,138 3,926,659 11,563,497

6,614,366

118,941,802 140,509,657 157,811,060 163,033,042 104,414,137 90,509,434

264,172,489 306,905,998 328,752,026 347,535,536 294,626,808 300,762,035

17,536 14,180 11,601 9,023 6,445 -

(129,759) (127,504) (126,232) (130,792) (6,661) -

(112,223) (113,324) (114,631) (121,769) (216) -

135,731,935 150,430,345 157,667,934 162,900,613 173,982,000 186,102,148

3,572,158 5,647,011 2,753,549 4,543,133

5,944,130 5,852,827 5,689,844 5,841,400 9,556,908 8,043,823

4,480,338 10,133,840 9,155,138 3,926,659 11,563,497

6,614,366

118,812,043 140,382,153 155,145,777 162,902,250 104,407,476 90,509,434

264,060,266$ 306,792,674$ 328,637,395$ 347,413,767$ 294,626,592$ 300,762,035$

Fiscal Year

74


EXPENSES, PROGRAM REVENUES, AND NET (EXPENSE) REVENUE


2007 2008 2009 2010

Expenses

Governmental activities

Instruction 249,442,304$ 276,616,196$ 283,065,227$ 289,725,326$

Instructional resource and media services 6,914,200 7,812,690 8,131,373 8,118,770

Curriculum and staff development services 6,732,763 6,634,975 7,796,851 7,146,831

Instructional leadership 6,845,017 8,182,808 7,439,610 10,062,924

School leadership 24,991,290 27,002,157 26,744,844 27,380,902

Guidance, counseling, and evaluation services 16,640,146 17,823,643 17,956,443 18,728,727

Social work services 865,761 924,492 969,118 929,902

Health services 4,751,649 6,728,800 5,333,060 5,619,695

Student transportation 8,981,233 7,033,092 10,101,240 10,499,734

Food Service 23,011,684 25,506,613 26,573,977 27,071,935

Cocurricular/Extracurricular activities 6,162,935 7,030,615 6,684,383 6,704,026

General administration 10,118,411 11,363,821 9,765,328 10,668,993

Facilities maintenance and operations 36,459,999 38,335,676 37,369,496 38,327,826

Security and monitoring services 2,562,847 7,638,267 3,697,044 3,847,937

Data processing services 16,493,955 9,569,934 12,164,713 16,879,163

Community services 5,022,107 4,701,421 5,546,340 5,614,407

Interest on long-term debt 19,028,178 18,332,357 16,266,467 16,555,683

Bond issuance cost and fees 78,282 108,891 219,929 419,457

Facilities repairs and maintenance 3,623,119 541,958 1,570,426

Payments to Fiscal Agent of Shared Services Arrangement

Payments to Juvenile Justice Alternative Education Programs 99,014 47,218 56,304 52,360

Intergovernmental Charges - - 677,662 698,644

Total governmental activities expenses 448,824,894 481,393,666 487,101,367 506,623,668

Business-type activities

Concessions 254,655 259,104 288,814 287,235

Total business-type activities expenses 254,655 259,104 288,814 287,235

Total expenses 449,079,549$ 481,652,770$ 487,390,181$ 506,910,903$

Program Revenues


Charges for services

Instruction 397,819$ 406,338$ 482,224$ 265,338$

Curriculum and staff development

Food service 9,098,542 9,934,102 10,332,066 9,803,316

Cocurricular/Extracurricular activities 4,966,084 4,896,022 4,782,751 4,667,101

Plant maintenance and operations 144,015 96,296 219,996 193,833

Security and monitoring services

Community services

Operating grants and contributions 73,767,745 77,211,854 84,599,937 105,829,524

Total governmental entities program revenue 88,374,205 92,544,612 100,416,974 120,759,112


Charges for services

Concessions 272,416 208,111 265,406 222,740

Total governmental entities business-type revenue 272,416 208,111 265,406 222,740

Total program revenues 88,646,621$ 92,752,723$ 100,682,380$ 120,981,852$

Net Expense

Governmental activities (360,450,689)$ (388,849,054)$ (386,684,393)$ (385,864,556)$

Business-type activities 17,761 (50,993) (23,408) (64,495)

Total net expenses (360,432,928)$ (388,900,047)$ (386,707,801)$ (385,929,051)$

Fiscal Year

Source: The Statement of Activities for the Garland Independent School District

75

Exhibit S-2

2011 2012 2013 2014 2015 2016

294,208,920$ 272,825,108$ 277,499,490$ 293,173,717$ 302,936,954$ 326,193,632$

8,193,015 7,368,582 7,672,838 7,897,014 8,240,779 8,476,668

8,581,755 8,514,256 10,248,468 11,848,699 13,966,276 15,289,822

9,757,848 8,365,560 8,659,257 9,444,098 9,476,390 9,404,380

27,930,380 26,527,981 27,137,920 28,022,164 29,359,186 31,430,176

18,429,805 16,939,997 17,824,829 19,318,654 21,727,176 23,134,956

929,097 894,164 942,133 1,339,419 1,253,128 1,057,374

5,654,397 5,329,439 5,446,268 6,228,989 6,545,294 6,867,464

10,811,955 10,643,267 11,379,383 12,966,006 13,717,097 15,154,555

27,407,886 26,033,888 27,886,434 31,285,050 32,701,421 31,575,592

7,290,111 7,686,728 8,228,081 8,556,794 9,077,240 10,327,317

11,255,328 10,252,916 11,631,845 15,141,046 15,338,293 15,353,186

37,876,948 35,728,649 36,004,303 38,454,227 39,578,630 40,912,661

3,803,372 3,667,174 3,812,056 4,100,656 4,348,891 6,318,189

13,777,228 21,287,235 14,343,551 15,490,524 24,346,683 40,659,486

5,289,947 3,086,571 2,540,248 3,198,004 3,462,272 4,063,974

15,378,492 691,607 14,113,757 11,926,352 13,571,186 18,083,049

437,694 229,464 23,786 176,140 1,486,831 434,984

2,297,277 1,511,554 4,540,264 5,364,055 1,605,080 1,984,797

31,422 69,224 64,011 74,889 81,790 78,603

66,234 45,714 5,742 4,824 10,716 30,168

700,543 658,438 664,700 662,918 667,640 692,137

510,109,654 468,357,516 490,669,364 524,674,239 553,498,953 607,523,170

258,978 247,054 261,762 259,754 282,724 213

258,978 247,054 261,762 259,754 282,724 213

510,368,632$ 468,604,570$ 490,931,126$ 524,933,993$ 553,781,677$ 607,523,383$

169,918$ 244,414$ 159,781$ 428,438$ 419,763$ 477,147$

375

9,220,579 9,011,473 8,939,886 9,276,095 9,272,764 7,729,332

4,900,323 5,096,626 5,410,308 5,261,990 4,292,064 4,974,632

176,730 268,172 177,533 151,719 184,070 209,727

132,960,615 91,587,206 80,546,373 90,430,370 98,476,190 114,478,252

147,428,165 106,208,266 95,233,881 105,548,612 112,644,851 127,869,090

263,967 245,953 260,455 252,564 271,241 -

263,967 245,953 260,455 252,564 271,241 -

147,692,132$ 106,454,219$ 95,494,336$ 105,801,176$ 112,916,092$ 127,869,090$

(362,681,489)$ (362,149,250)$ (395,435,483)$ (419,125,627)$ (440,854,102)$ (479,654,080)$

4,989 (1,101) (1,307) (7,190) (11,483) (213)

(362,676,500)$ (362,150,351)$ (395,436,790)$ (419,132,817)$ (440,865,585)$ (479,654,293)$

Fiscal Year

76


GENERAL REVENUES AND TOTAL CHANGE IN NET POSITION


2007 2008 2009 2010

Net Expense

Governmental activities (360,450,689)$ (388,849,054)$ (386,684,393)$ (385,864,556)$


Total net expenses (360,432,928)$ (388,900,047)$ (386,707,801)$ (385,929,051)$

General Revenues


Taxes

Property taxes levied for general purposes 172,127,966$ 142,436,130$ 146,318,903$ 142,764,547$

Property taxes levied for debt service 27,545,122 29,029,310 29,971,347 29,284,421

State Aid Formula Grants 165,397,418 207,567,446 216,066,364 220,388,265

Grants and contributions not restricted 1,648,225 1,684,092 1,061,717 3,365,788

Investment earnings 12,078,415 6,182,740 1,445,428 692,016

Miscellaneous 1,004,703 867,111 2,305,294 492,039

Transfers in (out) from business-type activities 14,400

Special Items:

Gain (Loss) on disposal of assets (5,173,807)

Liquidation of Claims Liability (Note 10)

Extraordinary Items:

Insurance recoveries - - - -

Total governmental general revenues 379,816,249 382,593,022 397,169,053 396,987,076


Investment earnings

Transfers in/(out) to governmental activities (14,400) - - -

Total business-type general revenues (14,400) - - -

Total primary government general revenues 379,801,849$ 382,593,022$ 397,169,053$ 396,987,076$

Change in Net Position

Governmental activities 19,365,560$ (6,256,032)$ 10,484,660$ 11,122,520$


Total primary government 19,368,921$ (6,307,025)$ 10,461,252$ 11,058,025$

Source: The Statement of Activities for the Garland Independent School District

Fiscal Year

77

Exhibit S-3

2011 2012 2013 2014 2015 2016

(362,681,489)$ (362,149,250)$ (395,435,483)$ (419,125,627)$ (440,854,102)$ (479,654,080)$

4,989 (1,101) (1,307) (7,190) (11,483) (213)

(362,676,500)$ (362,150,351)$ (395,436,790)$ (419,132,817)$ (440,865,585)$ (479,654,293)$

138,879,794$ 136,593,849$ 136,374,770$ 137,162,011$ 143,261,249$ 147,147,310$

28,513,656 27,998,477 27,925,169 28,090,094 29,406,886 44,156,322

224,600,836 233,715,404 254,240,046 270,830,210 278,214,031 290,555,354

5,192,762 4,482,295 268,714 504,719 457,688 1,614,381

250,405 286,150 278,338 96,855 155,049 1,152,599

947,721 1,362,616 1,247,836 896,992 1,496,153 917,065

(132,561) (429)

(877,204) 272,557 256,242 265,904 246,705

703,742

2,275,658 617,430 78,284 72,014

400,660,832 404,882,759 420,685,714 437,909,137 453,124,399 485,789,307

52 475

- - - - 132,561 429

- - - 52 133,036 429

400,660,832$ 404,882,759$ 420,685,714$ 437,909,189$ 453,257,435$ 485,789,736$

37,979,343$ 42,733,509$ 25,250,231$ 18,783,510$ 12,270,297$ 6,135,227$

4,989 (1,101) (1,307) (7,138) 121,553 216

37,984,332$ 42,732,408$ 25,248,924$ 18,776,372$ 12,391,850$ 6,135,443$

Fiscal Year

78


FUND BALANCES, GOVERNMENTAL FUNDS


2006 2007 2008

General Fund

Reserved 1,944,047$ 2,616,046$ 2,888,963$

Designated 8,384,211 9,092,630 9,364,540

Unreserved 64,979,308 69,108,105 59,511,619

Total general fund 75,307,566$ 80,816,781$ 71,765,122$

All Other Governmental Funds

Reserved

Capital Projects fund 80,944,482$ 28,863,213$ 16,314,804$

Other governmental funds 1,702,220 1,182,723

Debt Service Fund 5,075,415 2,662,244 1,590,931

Food Service 3,974,252 714,977 224,035

Unreserved

Reported in Federal Special Revenue Fund 33,862

Reported in State Special Revenue Fund 2,897,965

Reported in Local Special Revenue Fund 9,248,511 15,413,864 8,055,692

Total all other governmental funds 99,242,660$ 49,356,518$ 30,300,012$

Fund Balance Categories as Required by GASB Statement No. 54

General Fund 2011 2012 2013

Non-Spendable - Inventories 1,463,630$ 1,108,597$ 922,154$

Non-Spendable - Prepaid Items 828,738 882,579 1,742,306

Committed - Capital Expenditures for Equipment 1,963,746 2,022,659

Committed - Self-Insurance 8,000,000 8,000,000 8,000,000

Unassigned 94,109,829 114,372,129 132,544,119

106,365,943$ 126,385,964$ 143,208,579$

All Other Governmental Funds

Non-Spendable - Inventories 1,929,290 1,990,416 2,462,498

Non-Spendable - Prepaid Items 76,553

Restricted - Grant Funds 7,652,679 8,136,933 7,594,789

Restricted - Capital Acquisitions and Contractual Obligations 79,399,452 67,919,393 18,796,258

Restricted - Retirement of Long-term Debt 4,532,676 5,985,877 5,825,655

Committed - Local Special Revenue Fund 2,308,830 2,219,884 2,490,321

Assigned - Construction and Capital Expenditures 10,085,494 17,569,447 20,117,625

105,908,421$ 103,821,950$ 57,363,699$

Fiscal Year

Source: The Balance Sheet of Governmental funds for the Garland Independent School District

79

Exhibit S-4

2009 2010

2,124,945$ 2,096,956$

9,693,854 9,963,746

67,782,406 79,992,042

79,601,205$ 92,052,744$

39,433,222$ 23,485,325$

2,183,286 1,925,909

2,932,753 4,730,024

(972,195) 311,646

177,477 338,061

925,300 253,868

7,483,279 9,923,244

52,163,122$ 40,968,077$

2014 2015 2016

841,310$ 898,601$ 985,030$

1,947,959 1,453,566 1,044,039

8,000,000 8,000,000 8,000,000

143,786,285 150,065,060 162,004,045

154,575,554$ 160,417,227$ 172,033,114$

2,022,565 1,665,298 2,049,499

877,145 1,775,222 1,655,335

6,840,334 3,487,530 12,437,623

6,614,366 183,774,730 97,915,261

6,008,006 9,961,155 8,345,668

3,096,524 2,321,589 2,330,898

23,176,096 22,091,992 21,289,184

48,635,036$ 225,077,516$ 146,023,468$

Fiscal Year

80


GOVERNMENTAL FUNDS REVENUES


2007 2008 2009 2010

Local sources:

Property taxes 199,545,024$ 172,372,176$ 176,569,986$ 172,139,992$

Earnings on Investments 12,397,819 6,433,449 1,525,021 707,159

Other local sources 16,168,053 16,901,934 18,385,341 15,980,072

Total local sources 228,110,896 195,707,559 196,480,348 188,827,223

State sources:

Per Capita 20,818,371 14,874,076 13,743,144 5,823,420

Foundation School Program 144,579,047 197,188,087 206,872,320 214,724,391

On-behalf Payments 16,066,710 15,865,735 16,405,646 19,652,675

Other State Sources 21,435,300 16,848,372 16,615,806 15,958,239

Total state sources 202,899,428 244,776,270 253,636,916 256,158,725

Federal sources: 36,642,349 40,436,333 47,497,219 72,967,099

Total revenues 467,652,673$ 480,920,162$ 497,614,483$ 517,953,047$

Fiscal Year

Source: The Statement of Revenues, Expenditures, and changes in fund Balance for the Garland Independent

School District

81

Exhibit S-5

2011 2012 2013 2014 2015 2016

167,273,269$ 165,275,525$ 164,584,996$ 165,665,203$ 172,925,921$ 191,213,265$

258,505 286,945 281,502 99,336 151,757 1,185,673

15,987,134 17,196,383 16,155,364 17,532,397 16,158,382 15,031,358

183,518,908 182,758,853 181,021,862 183,296,936 189,236,060 207,430,296

17,945,835 13,688,849$ 25,588,455$ 14,229,508$ 14,300,164$ 9,745,185$

206,655,001 220,026,555 228,651,591 256,600,702 263,762,268 280,665,610

19,836,443 18,391,316 17,673,118 20,763,720 21,863,803 21,873,710

22,808,914 16,285,452 11,739,565 17,349,345 20,619,462 25,246,920

267,246,193 268,392,172 283,652,729 308,943,275 320,545,697 337,531,425

95,044,989 60,791,256 51,107,017 51,334,853 56,740,087 56,398,403

545,810,090$ 511,942,281$ 515,781,608$ 543,575,064$ 566,521,844$ 601,360,124$

Fiscal Year

82


GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO


2007 2008 2009 2010

Expenditures

Governmental funds

11 Instruction 242,950,503$ 265,646,555$ 274,554,083$ 277,736,342$

12 Instructional resources and media services 6,838,200 7,209,018 7,683,187 7,550,087

13 Curriculum and staff development services 6,734,791 6,678,169 7,829,424 7,085,074

Total function 10 256,523,494 279,533,742 290,066,694 292,371,503

21 Instructional leadership 6,636,002 8,218,111 7,317,361 10,051,751

23 School leadership 24,841,538 26,834,758 26,613,132 26,802,850

Total function 20 31,477,540 35,052,869 33,930,493 36,854,601

31 Guidance, counseling, and evaluation services 16,638,259 17,827,951 17,888,859 18,443,795

32 Social work services 863,828 928,221 971,385 919,581

33 Health services 4,699,752 4,979,712 5,259,870 5,469,179

34 Student transportation 9,550,651 11,708,937 11,657,475 8,330,801

35 Food service 22,176,948 24,533,327 25,601,394 25,457,357

36 Extracurricular activities 5,670,446 6,298,194 5,946,729 5,722,934

Total function 30 59,599,884 66,276,342 67,325,712 64,343,647

41 General administration 9,898,251 9,890,459 9,645,633 10,088,727

Total function 40 9,898,251 9,890,459 9,645,633 10,088,727

51 Facilities maintenance and operations 35,270,590 38,853,474 35,974,175 36,352,005

52 Security and monitoring services 2,540,258 2,966,480 3,431,654 3,557,014

53 Data processing services 16,964,593 11,953,596 11,961,227 16,369,064

Total function 50 54,775,441 53,773,550 51,367,056 56,278,083

61 Community service 3,992,523 4,094,617 4,676,956 4,680,266

Total function 60 3,992,523 4,094,617 4,676,956 4,680,266

71 Debt service

Principal on long-term debt 21,565,040 24,471,922 21,144,985 20,565,000

Interest on long-term debt 21,871,202 18,579,782 17,752,528 16,383,178

Bond issuance costs and fees 78,283 108,891 1,004,521 419,457

Total function 70 43,514,525 43,160,595 39,902,034 37,367,635

81 Facilities acquisition/construction 52,232,367 17,282,121 4,724,520 11,013,287

Total function 80 52,232,367 17,282,121 4,724,520 11,013,287

93 Payments related to Shared Services Arrangements

95 Payments to Juvenile Justice Alternative 99,014 47,218 56,304 52,360

99 Other Intergovernmental Charges 677,662 698,644

Total function 90 99,014 47,218 733,966 751,004

Total expenditures 512,113,039$ 509,111,513$ 502,373,064$ 513,748,753$

Debt service as a percentage of noncapital expenditures 9.5% 9.3% 8.1% 7.5%

Fiscal Year

Source: Statement of Revenues, Expenditures, and changes in Fund Balance - Governmental Funds for the Garland

Independent School District

83

Exhibit S-6

2011 2012 2013 2014 2015 2016

286,385,667$ 265,783,902$ 264,641,540$ 278,396,221$ 292,682,387$ 295,875,044$

7,606,662 6,907,353 7,200,650 7,414,899 7,635,828 7,976,025

8,436,124 8,546,167 10,218,104 11,821,331 14,150,661 14,955,504

302,428,453 281,237,422 282,060,294 297,632,451 314,468,876 318,806,573

9,757,128 8,087,798 8,548,600 9,136,533 9,267,235 8,909,833

27,214,873 26,327,408 26,963,180 27,735,396 29,106,054 30,227,932

36,972,001 34,415,206 35,511,780 36,871,929 38,373,289 39,137,765

18,188,436 16,815,753 17,725,446 19,203,404 21,512,159 22,461,110

916,259 894,034 939,051 1,346,199 1,338,547 1,045,330

5,481,977 5,240,443 5,346,833 6,132,616 6,389,549 6,618,661

8,958,596 12,375,738 12,992,842 14,052,926 15,163,237 16,638,683

25,590,165 24,873,220 27,046,189 30,293,793 31,790,346 29,920,357

6,194,537 6,643,953 7,128,827 8,007,892 7,795,306 9,052,990

65,329,970 66,843,141 71,179,188 79,036,830 83,989,144 85,737,131

10,143,293 9,994,137 10,799,316 14,962,000 15,054,618 14,799,780

10,143,293 9,994,137 10,799,316 14,962,000 15,054,618 14,799,780

35,809,238 34,621,542 34,104,435 37,405,228 37,643,590 38,407,218

3,551,656 3,459,277 3,571,740 3,821,316 4,072,994 6,123,148

18,896,247 21,004,438 11,129,867 12,235,673 21,405,047 48,340,584

58,257,141 59,085,257 48,806,042 53,462,217 63,121,631 92,870,950

4,366,739 2,229,787 1,663,945 2,302,771 2,695,992 3,059,647

4,366,739 2,229,787 1,663,945 2,302,771 2,695,992 3,059,647

21,745,000 22,555,971 26,329,896 25,368,218 25,765,010 38,298,252

15,536,957 15,008,901 16,053,653 14,637,796 15,807,117 20,492,629

1,164,685 2,098,437 23,786 176,140 1,486,831 434,984

38,446,642 39,663,309 42,407,335 40,182,154 43,058,958 59,225,865

8,513,304 14,061,387 52,662,091 15,407,928 20,168,396 54,519,046

8,513,304 14,061,387 52,662,091 15,407,928 20,168,396 54,519,046

31,423 69,224 64,011 74,889 81,790 78,603

66,234 45,714 5,742 4,824 10,716 30,168

700,543 658,438 664,700 662,918 667,640 692,137

798,200 773,376 734,453 742,631 760,146 800,908

525,255,743$ 508,303,022$ 545,824,444$ 540,600,911$ 581,691,050$ 668,957,665$

7.7% 8.3% 8.7% 7.7% 7.4% 8.9%

Fiscal Year

84


OTHER FINANCING SOURCES AND USES AND NET CHANGE IN FUND BALANCES


2007 2008 2009 2010

Excess of revenues over

(under) expenditures (44,460,366)$ (28,191,351)$ (4,758,581)$ 4,204,294$

Other Financing Sources (Uses)

Capital related debt issued (Bonds) 63,395,000

Refunding Bonds Issued

Sale of real or personal property 69,039 83,186 232,155 52,200

Non-Current Loan Proceeds 3,525,000

Transfers in 10,014,400 2,788 1,292,791 3,887,810

Premium or Discount on Issuance of Bonds 3,666,822

Prepaid Interest

Other Resources

Insurance Recovery

Transfers out (10,000,000) (2,788) (1,292,791) (6,887,810)

Payments to refunded bond escrow agents - - (36,361,203) -

Total other financing sources (uses) 83,439 83,186 34,457,774 (2,947,800)

Extraordinary Item - Insurance Recovery

Net change in fund balances (44,376,927)$ (28,108,165)$ 29,699,193$ 1,256,494$

Fiscal Year

Source: Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds for the Garland

Independent School District

85

Exhibit S-7

2011 2012 2013 2014 2015 2016

20,554,347$ 3,639,259$ (30,042,836)$ 2,974,153$ (15,169,206)$ (67,597,541)$

71,460,000 12,485,000 193,320,000 40,560,000

177,560,213 26,725,000

71,984 186,936 271,558 247,181 265,904 371,262

1,767 10,939,244 9,990,338 12,000,000 12,880,477 9,305,830

7,289,674 31,307,398 1,574,982 16,754,162 6,405,364

238,982

41,262 103,005 - 21,799

7,956 42,299 37,855

(10,001,767) (10,009,462) (10,000,000) (12,000,000) (13,000,000) (9,243,249)

(12,637,102) (208,224,256) - (28,920,859) (12,767,184) (47,261,626)

56,423,538 14,294,291 407,200 (335,841) 197,453,359 159,380

2,275,658

79,253,543$ 17,933,550$ (29,635,636)$ 2,638,312$ 182,284,153$ (67,438,161)$

Fiscal Year

86

GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit S-8

APPRAISED VALUE AND ACTUAL VALUE OF TAXABLE PROPERTY


Business Total

Commercial Residential Personal Less: Estimated Total

Fiscal Year Real Property Real Property Property Exemptions Taxable Value Direct Rate(1)

2007 3,610,309,650 9,848,443,080 1,570,168,560 1,989,676,234 13,039,245,056 1.5449

2008 4,190,178,440 10,154,721,430 1,777,817,820 2,528,589,708 13,594,127,982 1.2533

2009 4,491,799,740 10,248,877,770 2,002,138,070 2,673,331,019 14,069,484,561 1.2533

2010 4,550,703,240 10,002,025,960 1,981,784,350 2,882,170,137 13,652,343,413 1.2533

2011 4,222,557,840 9,851,742,940 1,874,995,440 2,583,259,916 13,366,036,304 1.2533

2012 4,142,736,980 9,713,208,510 1,921,285,080 2,691,665,901 13,085,564,669 1.2533

2013 4,175,283,820 9,536,561,190 1,966,053,360 2,706,186,729 12,971,711,641 1.2533

2014 4,366,481,800 9,530,491,010 1,901,121,140 2,733,098,338 13,064,995,612 1.2533

2015 4,596,551,430 9,917,340,240 1,953,899,600 2,789,637,915 13,678,153,355 1.2533

2016 4,912,097,630 10,770,670,000 1,973,566,770 3,654,803,993 14,001,530,407 1.3533

Appraised Value

Source: Appraised Value - Dallas Central Appraisal District

Total Direct Rate - District Information

Notes:

* The Garland ISD Tax Office is the collecting agent for the District

* Property is appraised at full market value. Properties are reappraised at least once every three years.

* Represents total appraised value before exemptions.

(1) Per $1,000 of assessed value

87


DIRECT AND OVERLAPPING PROPERTY TAX RATES


Maintenance City City City City City

and Debt of Dallas of of of of

Fiscal Year Operations Service Total Garland County Rowlett Sachse Dallas Mesquite

2007 1.3316 0.2133 1.5449 0.6786 0.5539 0.7472 0.5534 0.7292 0.6200

2008 1.0400 0.2133 1.2533 0.6886 0.5672 0.7472 0.5534 0.7479 0.6400

2009 1.0400 0.2133 1.2533 0.6996 0.5764 0.7472 0.6100 0.7479 0.6400

2010 1.0400 0.2133 1.2533 0.7046 0.6022 0.7472 0.7058 0.7479 0.6400

2011 1.0400 0.2133 1.2533 0.7046 0.6233 0.7472 0.7058 0.7970 0.6400

2012 1.0400 0.2133 1.2533 0.7046 0.6237 0.7472 0.7708 0.7970 0.6400

2013 1.0400 0.2133 1.2533 0.7046 0.6434 0.7472 0.7708 0.7970 0.6400

2014 1.0400 0.2133 1.2533 0.7046 0.6538 0.7472 0.7708 0.7970 0.6400

2015 1.0400 0.2133 1.2533 0.7046 0.6639 0.7872 0.7708 0.7970 0.6400

2016 1.0400 0.3133 1.3533 0.7046 0.6628 0.7872 0.7573 0.7970 0.6400

Garland Independent School District Overlapping Rates

Source: Appropriate government entities' tax departments.

Note: Tax rates are per $1,000 of assessed value.

88


PRINCIPAL PROPERTY TAXPAYERS


Percentage Percentage

of Total of Total

Taxable Taxable Taxable Taxable

Assessed Assessed Assessed Assessed

Taxpayer Value Rank Value Value Rank Value

Walmart 146,516,120$ 1 1.05% 101,729,650$ 1 0.82%

Simon Property Group 138,278,000 2 0.99% 83,546,730 3 0.67%

Kraft Foods/ U S Foods 108,295,965 3 0.77% 53,647,104 6 0.43%

Verizon/G.T.E. 71,361,960 4 0.51% 62,001,190 4 0.50%

Oncor 66,639,770 5 0.48%

Landmark Lakeway 65,909,350 6 0.47%

Engineered Polymer 49,736,039 7 0.36% 38,706,581 10 0.31%

Plastipak Packaging 47,544,434 8 0.34% 56,429,845 5 0.45%

BMEF Stoneleigh LP 47,210,340 9 0.34% 0.00%

OMNINET Town Center 43,562,000 10 0.31%

Texas Utilities Electric 84,843,400 2 0.68%

Sears Roebuck Co. 47,001,483 7 0.38%

Interceramic 42,248,944 8 0.34%

Simpson Financing 41,666,800 9 0.33%

Total 785,053,978$ 5.62% 611,821,727$ 4.91%

2016 2007

Source: Dallas Central Appraisal District.

89


PROPERTY TAX LEVIES AND COLLECTIONS

CURRENT FISCAL YEAR AND NINE YEARS PRIOR (UNAUDITED)

Taxes Levied Percentage Percentage

Fiscal Year for the of Delinquent of

Ending Fiscal Year Amount (1) Levy Taxes Amount (2) Levy (3)

2007 195,980,635 194,382,179 99.18% 3,020,320 197,402,499 100.73%

2008 170,375,206 167,691,108 98.42% 1,959,918 169,651,026 99.57%

2009 176,332,850 172,938,357 98.07% 1,612,698 174,551,055 98.99%

2010 171,104,820 168,743,825 98.62% 1,242,479 169,986,304 99.35%

2011 167,516,533 164,067,348 97.94% 1,523,233 165,590,581 98.85%

2012 164,001,382 162,314,401 98.97% 1,337,995 163,652,396 99.79%

2013 162,574,462 161,649,499 99.43% 989,412 162,638,911 100.04%

2014 163,743,590 163,150,757 99.64% 740,452 163,891,209 100.09%

2015 171,428,296 170,432,734 99.42% 744,329 171,177,063 99.85%

2016 189,482,711 188,970,074 99.73% - 188,970,074 99.73%

Total Collections to Date

Collected Within the Fiscal Year

of the Levy

Collections other than

Current Year

Source: Dallas Central Appraisal District and District records.

Notes:

(1) The Garland ISD Tax Office is the collecting agent for the District

(2) Total cash collections is total cash net of interest and penalty collections and other judgments

(3) Total Collections as a percentage of the levy may exceed 100% as a result of the collection of Ag

Rollback taxes which do not result in an adjustment of the levy.

90


OUTSTANDING DEBT BY TYPE


Ratio of Outstanding

General Total Debt to Debt

Fiscal Year Obligation Notes Capital Primary Assessed Per

Ending Bonds (1) Payable Lease Government Value Capita

2007 433,838,174 433,838,174$ 3.33% 1,601

2008 408,608,749 408,608,749$ 3.01% 1,497

2009 421,052,464 3,525,000 424,577,464$ 3.02% 1,548

2010 399,969,726 3,070,000 403,039,726$ 2.95% 1,457

2011 443,730,948 2,600,000 446,330,948$ 3.34% 1,606

2012 439,956,861 2,115,000 988,183 443,060,044$ 3.39% 1,589

2013 409,444,042 1,712,643 411,156,685$ 3.17% 1,455

2014 379,927,635 1,432,602 381,360,237$ 2.92% 1,329

2015 545,521,903 1,055,034 546,576,937$ 4.00% 1,898

2016 504,535,143 504,535,143$ 3.60% 1,728

Governmental Activities

Source: Dallas Central Appraisal District and District records.

Note:

(1) The ratio of outstanding debt to personal income has not been included as personal income data is not

available.

(2) Includes accreted interest and premium on bond issuance.

91


DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITES DEBT

AS OF AUGUST 31, 2015 (UNAUDITED)

Estimated

Share of

Estimated Direct and

Debt Percentage Overlapping

Governmental Unit Outstanding Applicable Debt

Direct:


General Obligation Bonds 504,535,142$ 100.00% 504,535,142$

Capital Leases 3,636,975 100.00% 3,636,975

Total Direct Debt 508,172,117 508,172,117

Overlapping:

City of Garland 201,656,669 90.94% 183,386,575

City of Rowlett 58,155,330 84.79% 49,309,904

City of Sachse 35,803,022 59.97% 21,471,072

City of Dallas 1,774,890,086 0.32% 5,679,648

City of Mesquite 149,429,206 0.09% 134,486

City of Richardson 185,850,563 0.04% 74,340

City of Wylie 67,811,569 0.57% 386,526

Dallas County 227,980,000 7.71% 17,577,258

Dallas County Community College District 294,050,000 7.71% 22,671,255

Dallas County Hospital District 713,947,070 7.71% 55,045,319

Dallas County Schools 50,405,000 7.71% 3,886,226

Total Overlapping Debt 3,759,978,515 359,622,609

Total Direct and Overlapping Debt 4,268,150,632$ 867,794,726$

Taxable Assessed Valuation 14,001,530,407

Ratio of Direct and Overlapping Debt to taxable assessed valuation 6.20%

Direct and Overlapping Debt per Capita 2,972.35$

Source: Debt outstanding and estimated percentage applicable for taxing entities other than the District was

obtained from the Municipal Advisory Council of Texas.

92


LEGAL DEBT MARGIN INFORMATION


Chapter 45 (School District Funds) Subchapter A (Taxes Bonds and Maintenance Taxes) of the Texas Education

Code governs the issuance of bonds by independent school districts in the State of Texas. Key points regarding

limitations on the issuance of bonds are:

Sec. 45.001(b) – The bonds must mature serially or otherwise not more than 40 years from their date.

Sec. 45.0031(a) – Before issuing bonds described by Section 45.001, a school district must demonstrate to

the attorney general under Subsection (b) or (c) that, with respect to the proposed issuance, the district has a

projected ability to pay the principal of and interest on the proposed bonds and all previously issued bonds

other than bonds authorized to be issued at an election held on or before April, 1 1991, and issued before

September 1, 1992, from a tax at a rate not to exceed $0.50 per $100 of valuation.

The full text of Chapter 45 of the Texas Education Code can be found at www.capitol.state.tx.us.

The District’s debt service tax rate for fiscal year 2016 is $0.3133 per $100 of valuation.

Source: Texas Education Code and District records.

93

http://www.capitol.state.tx.us/


DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN CALENDAR YEARS (UNAUDITED)

Personal Income Per Capita

Period Estimated (hundreds of Personal Unemployment

Ending Population dollars) Income (dollars) Rate

2007 270,963 (1) (1) 4.0%

2008 272,967 (1) (1) 5.1%

2009 274,211 (1) (1) 8.5%

2010 276,552 (1) (1) 7.9%

2011 277,833 (1) (1) 8.3%

2012 278,785 (1) (1) 6.9%

2013 282,501 (1) (1) 6.4%

2014 287,049 (1) (1) 5.6%

2015 287,927 (1) (1) 4.1%

2016 291,956 (1) (1) 3.9%

Sources:

Population: District estimate

Personal Income (thousands of dollars): U. S. Bureau of Economic Analysis - Dallas-Plano-Irving, TX

Metropolitan Division

Per Capita Personal Income (dollars): U. S. Bureau of Economic Analysis - Dallas-Plano-Irving, TX

Metropolitan Division

Unemployment Rate: U.S. Department of Labor - Bureau of Labor Statistics

Note:

(1) Data not available

94


PRINCIPAL EMPLOYERS

CURRENT YEAR AND EIGHT YEARS AGO (UNAUDITED)

Percentage Percentage

of of

Employer Employees Rank Employment Employees Rank Employment

Garland ISD 7,514 1 51.16% 7,254 1 35.29%

City of Garland 2,000 2 13.62% 2,500 3 12.16%

Wal-Mart Super Centers 1,500 3 10.21% 1,750 4 8.51%

Baylor Medical Center Garland 1,185 4 8.07% 1,200 6 5.84%

US Food Service 520 5 3.54%

APEX Tool Group 467 6 3.18%

Hatco (Resistol) 401 7 2.73%

SilverLine Window 400 8 2.72%

City of Rowlett 362 9 2.46%

Home Depot 339 10 2.31%

Raytheon 3,500 2 17.03%

Sears Logistic Services 1,300 5 6.32%

Ecolab 1,000 7 4.87%

Atlas Copco 700 8 3.41%

International/SST Truck 700 9 3.41%

Kingsley Tools 650 10 3.16%

Total 14,688 100.00% 20,554 100.00%

2016 2008

Source: Garland Chamber of Commerce

Notes:

* Data not available prior to 2008

* Total employment for all employers within the District is not available

95


FULL TIME EQUIVALENT DISTRICT EMPLOYEES BY TYPE

LAST TEN FISCAL YEARS (UNADUTIED)

2007 2008 2009 2010

Teachers 3,773.7 3,806.0 3,785.2 3,720.4

Professional Support

Psychological Associate 1.0 1.0 1.0 -

Audiologist 3.0 3.0 3.0 3.0

Counselor 127.8 135.6 135.5 133.0

Educational Diagnostician 77.4 71.4 69.8 61.5

Librarian 75.0 77.5 77.5 80.0

Musical Therapist - - - -

Occupational Therapist 13.0 14.0 13.0 12.6

Corrective Therapist 0.5 1.0 1.0 -

Orientation/Mobility Instructor 1.0 1.0 2.0 2.0

Physical Therapist 8.0 7.0 5.0 7.0

School Nurse 75.0 77.0 77.4 79.4

LSSP/Psychologist 8.0 8.0 8.0 8.0

Social Worker 16.8 15.5 18.2 19.3

Speech Therapist/Speech-Language Pathologist 53.7 58.5 59.2 56.9

Visiting Teacher 6.0 5.0 5.0 5.0

Work-Based Learning Site Coordinator - - - 10.1

Teacher Facilitator 48.0 46.0 55.7 90.0

Department Head - - - -

Athletic Trainer - - - 8.6

Campus Professional Personnel 8.5 25.5 25.5 25.4

Non-Campus Professional Personnel 116.2 133.7 149.0 149.3

Total Professional Support 638.9 680.7 705.8 751.1

Campus Administration

Assistant Principal 112.0 115.0 113.9 114.0

Principal 70.0 72.0 72.0 72.0

Teacher Supervisor 0.5 4.0 7.0 4.1

Registrar - - - 8.0

Total Campus Administration 182.5 191.0 192.9 198.1

Central Administration

Assistant/Assoc/Deputy Superintendent 4.3 4.5 4.5 4.5

Instructional Officer 13.0 12.4 12.4 -

District Instructional Program Director - - - 17.0

Superintendent 0.9 1.0 1.0 1.0

Teacher Supervisor 32.5 43.0 60.8 41.3

Athletic Director 2.0 2.0 2.0 2.0

Business Manager 1.0 1.0 1.0 1.0

Tax Assessor and/or Collector 1.0 1.0 1.0 1.0

Director of Personnel/HR 4.0 4.0 4.0 4.0

Total Central Administration 58.7 68.9 86.7 71.8

Educational Aides 279.1 373.1 374.3 455.5

Auxiliary Staff 2,176.6 2,134.1 2,242.9 2,197.4

Total All Full Time Equivalent Employees 7,109.5 7,253.8 7,387.8 7,394.3

Full Time Equivalent Employees

Source: District records for the fall PEIMS submission

96

Exhibit S-17

2011 2012 2013 2014 2015 2016

3,710.9 3,651.1 3,636.9 3,646.8 3,679.1 3,664.0

- - - - - -

3.0 3.0 2.0 2.0 2.0 2.0

136.0 129.3 130.8 134.6 140.2 139.3

54.7 57.6 58.2 56.6 57.8 56.8

79.0 76.0 76.0 75.0 72.9 74.8

- - - 1.0 0.7 1.0

11.4 9.0 10.0 10.0 10.0 10.0

- - - - - -

2.0 - 2.0 2.0 0.9 2.0

6.0 4.9 5.8 6.0 6.0 6.0

79.0 76.4 75.0 82.0 82.0 85.0

8.0 8.0 8.0 8.0 9.0 9.0

20.8 12.8 8.0 7.0 6.0 7.0

54.2 50.3 50.4 52.5 54.6 56.1

5.0 4.0 4.0 4.0 4.0 3.0

6.0 7.3 8.4 4.3 - -

110.4 131.7 120.6 107.2 107.4 117.3

- - - 12.7 - -

2.0 3.8 5.1 4.8 6.7 8.2

32.0 29.5 26.9 31.3 27.2 26.0

156.1 158.5 148.4 173.3 183.5 197.5

765.6 762.1 739.6 774.3 770.9 801.0

113.0 107.0 106.0 108.9 106.8 116.0

73.0 72.0 71.0 71.0 71.0 70.1

- - - 0.1 - -

8.0 10.0 10.0 2.0 2.0 2.0

194.0 189.0 187.0 182.0 179.8 188.1

4.5 4.5 4.5 5.5 5.5 5.0

- - - - - -

17.0 15.0 16.0 19.0 16.0 16.0

1.0 1.0 1.0 1.0 1.0 1.0

29.5 28.5 28.4 27.5 27.5 26.8

2.0 2.0 2.0 2.0 2.0 2.0

1.0 1.0 1.0 1.0 1.0 1.0

1.0 1.0 1.0 1.0 1.0 1.0

4.0 4.0 - 4.0 4.0 4.0

60.0 57.0 53.9 61.0 58.0 56.8

432.1 461.8 454.8 516.7 547.2 538.1

2,182.5 2,116.8 2,099.8 2,126.8 2,183.4 2,044.7

7,345.1 7,237.8 7,172.0 7,307.6 7,418.4 7,292.7

Full Time Equivalent Employees

97


OPERATING STATISTICS


Percentage

of Students

Receiving

Free or

Fiscal Operating Cost per Percentage Teaching Pupil- Reduced-Price

Year Enrollment Expenditures Pupil Change Staff Teacher Ratio Meals

2007 56,955 350,129,255 6,147 10.01% 3,774 15.1 47.7%

2008 57,169 383,553,961 6,709 9.55% 3,806 15.0 46.0%

2009 57,510 380,113,001 6,610 -0.90% 3,785 15.2 46.1%

2010 57,861 370,578,596 6,405 -2.51% 3,720 15.6 51.4%

2011 57,833 371,744,956 6,428 0.31% 3,711 15.6 52.9%

2012 58,151 367,647,358 6,322 -1.10% 3,651 15.9 60.5%

2013 58,059 389,695,690 6,712 6.00% 3,637 16.0 61.0%

2014 57,616 413,888,034 7,184 6.21% 3,647 15.8 60.8%

2015 57,436 432,733,720 7,534 4.55% 3,679 15.6 60.5%

2016 57,517 448,433,858 7,797 3.63% 3,664 15.7 65.6%

Source: District records

98


OPERATING INDICATORS


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Teachers By Highest Degree Held

No Degree 0.6% 0.7% 0.4% 1.0% 0.2% 0.2% 0.2% 0.5% 0.4% 0.4%

Bachelors 74.1% 73.9% 73.7% 72.7% 72.1% 71.4% 70.8% 69.8% 69.4% 69.5%

Masters 24.3% 24.6% 24.8% 26.1% 26.7% 27.5% 28.1% 28.8% 29.3% 29.3%

Doctorate 1.0% 0.9% 1.1% 1.0% 1.0% 0.9% 0.9% 0.9% 0.9% 80.0%

Teachers By Years of Experience

Beginning Teachers 12.4% 6.8% 5.9% 3.1% 3.8% 3.4% 4.9% 5.3% 4.5% 5.3%

1 - 5 Years of Experience 29.6% 34.5% 34.3% 33.6% 30.2% 27.5% 23.8% 22.9% 25.0% 27.2%



Over 20 Years of Experience 17.3% 17.5% 16.9% 16.9% 16.4% 15.4% 15.4% 15.0% 14.8% 14.2%

Average Salaries by Experience

Beginning Teachers 47,321$ 43,836$ 45,508$ 47,308$ 46,839$ 46,605$ $46,462 $48,899 $50,150 $50,862

1 - 5 Years of Experience 44,228 44,673 46,237 47,319 47,493 47,313 $48,038 $49,232 $50,565 $52,115



Over 20 Years of Experience 56,456 57,546 58,875 59,806 59,899 59,237 $59,546 $59,925 $61,323 $61,984

Student Teacher Ratio 15.1 15.0 15.2 15.6 15.6 15.9 16.0 15.8 15.6 15.7

Fiscal Year

Source: District records for the fall PEIMS submission

99


SCHOOL BUILDING INFORMATION


2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Schools:

Elementary

Buildings 47 47 47 47 47 47 47 47 47 47

Enrollment 26,066 25,901 25,938 26,395 26,330 26,471 26,364 26,351 26,135 25,971

Middle

Buildings 12 12 12 12 12 12 12 12 12 12

Enrollment 12,453 12,473 12,568 12,742 12,842 12,789 12,871 12,715 12,754 12,595

High

Buildings 7 7 7 7 7 7 7 7 7 7

Enrollment 16,113 16,248 16,269 16,441 17,123 16,863 17,198 16,993 17,091 17,470

Pre-K

Buildings 2 2 2 2 2 2 2 2 2 2

Enrollment 1,308 1,390 1,520 1,427 1,395 1,453 1,467 1,217 1,098 1,132

Other

Buildings 3 3 3 3 3 3 3 3 3 3

Enrollment 503 572 635 637 143 575 449 340 358 349

Student Services

Buildings:

Enrollment Center 1 1 1 1 1 1 1 1 1 1

Transportation 1 1 1 1 1 1 1 1 1 1

Infant Center 1 1 1 1 1 1 1 1 1 1

Other

Buildings:

Administration 1 1 1 1 1 1 1 1 1 1

Tax Office 1 1 1 1 1 1 1 1 1 1

Technology 1 1 1 1 1 1 1 1 1 1

Professional Development Center 1 1 1 1 1 1 1 1 1 1

Curtis Culwell Center 1 1 1 1 1 1 1 1 1 1

Facility Services 1 1 1 1 1 1 1 1 1 1

Agriculture Training Center 1 1 1 1 1 1 1 1 1 1

Athletics

Stadiums (includes Athletic Office) 2 2 2 2 2 2 2 2 2 2

Running Tracks 7 7 7 7 7 7 7 7 7 7

Tennis Courts 7 7 7 7 7 7 7 7 7 7

Softball Fields 7 7 7 7 7 7 7 7 7 7

Baseball Fields 7 7 7 7 7 7 7 7 7 7

Fiscal Year

Source: District records

100

Federal Awards Section



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101

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Trustees Garland Independent School District Garland, Texas We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Garland Independent School District’s (the “District”) as of and for the year ended August 31, 2016, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated January 18, 2017. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. We did identify a deficiency in internal control, described in the accompanying schedule of findings and questioned costs that we consider to be a significant deficiency and is listed as item #2016-001.


102

Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which is described in the accompanying schedule of findings and questioned costs as item #2016-001. The District’s Response to Findings The District’s response to the findings identified in our audit is described in the accompanying schedule of findings and questioned costs. The District’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.




whitleypenn.com

103

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE

REQUIRED BY THE UNIFORM GUIDANCE To the Board of Trustees Garland Independent School District Garland, Texas Report on Compliance for Each Major Federal Program We have audited Garland Independent School District’s (the “District”) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the District’s major federal programs for the year ended August 31, 2016. The District’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the District’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the District’s compliance.


104

Opinion on Each Major Federal Program In our opinion, the District complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended August 31, 2016. Report on Internal Control Over Compliance Management of the District is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the District’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.


GARLAND INDEPENDENT SCHOOL DISTRICT Exhibit K-1

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


See Notes to Schedule of Expenditures of Federal Awards

(1) (2) (3) (4) (5)

FEDERAL GRANTOR/ FEDERAL PASS-THROUGH

PASS-THROUGH GRANTOR/ CFDA ENTITY IDENTIFYING FEDERAL INDIRECT

PROGRAM OF CLUSTER TITLE NUMBER NUMBER EXPENDITURES COSTS

US Department of Education

Passed Through State Department of Education

ESEA Title I Part A - Improving Basic Programs 84.010A 15610101057909 140,205 4,189

ESEA Title I Part A - Improving Basic Programs 84.010A 16610101057909 12,391,065 359,588

ESEA Title I Part A - Improving Basic Programs 84.010A 17610101057909 420,172 14,011

ESEA Title I - Priority and Focus School Grant 84.010A 16610112057909043 26,313 789

Total Title I Part A 12,977,755 378,577

IDEA - Part B, Formula 84.027A 156600010579096600 5,833 (42)

IDEA - Part B, Formula 84.027A 166600010579096600 9,249,271 273,854

IDEA - Part B, Formula 84.027A 176600010579096600 169,956 2,780

IDEA - Part B, Preschool 84.173A 156610010579096610 3,140 44

IDEA - Part B, Preschool 84.173A 166610010579096610 160,280 4,554

IDEA - Part B, Preschool 84.173A 176610010579096610 13,556 385

Total Special Education Cluster (IDEA) 9,602,036 281,575

Vocation Education - Basic Grant 84.048A 16420006057909 578,987 11,633

Vocation Education - Basic Grant 84.048A 17420006057909 41,302 786

Total CFDA Number 84.048A 620,289 12,419

ESEA Title III, Part A, LEP 84.365A 15671001057909 8,554 72

ESEA Title III, Part A, LEP 84.365A 16671001057909 1,499,629 30,315

ESEA Title III, Part A, LEP 84.365A 1771001057909 37,645 930

ESEA Title III, Part A, Immigrant 84.365A 16671003057909 77,349 1,547

ESEA Title III, Part A, ELA Grant for UC & Y 84.365B 156711037110023 39,551 -

Total CFDA Number 84.365A 1,662,728 32,864

ESEA Title II, Part A, Teacher & Principal Training 84.367A 15694501057909 29,721 659

ESEA Title II, Part A, Teacher & Principal Training 84.367A 16694501057909 1,004,023 20,152

ESEA Title II, Part A, Teacher & Principal Training 84.367A 17694501057909 73,737 1,470

Total CFDA Number 84.367A 1,107,481 22,281

AP/IB Test Fee Subsidies 84.330B 51061401 33,985

Summer School LEP 84.369A 69551502 58,993

Total Passed Through State Department of Education 26,063,267 727,716

Passed Through Region 10 ESC - TEXSHEP Grant 84.196A 16-056 20,162

Total US Department of Education 26,083,429 727,716

US Department of Health & Human Services

Passed Through State Dept of Health and Human Services

Medical Assistance Program 93.778 529-07-0157-00128 298,944

Total Passed Through State Dept of Health and

Commission 298,944

Total US Department of Health and Human Services 298,944

US Department of Agriculture

Passed Through State Department of Education

School Breakfast Program - Cash Assistance 10.553 71401601 4,578,248 186,095

National School Lunch Program - Cash Assistance 10.555 71301601 16,331,132 682,348

Total Passed Through State Department of Education 20,909,380 868,443

Passed Through State Department of Agriculture

USDA Donated Commodities - Non-Cash Assistance 10.555 00279 1,921,099

Summer Food Service Program - Cash Assistance 10.559 00279 206,559 8,606

Total Child Nutrition Cluster 23,037,038 877,049

Child and Adult Care Food Program - Cash Assistance 10.558 00279 176,351 9,117

NSLP Training Assistance Grant 10.560 00279 5,000

Total US Department of Agriculture 23,218,389 886,166

Total Expenditures of Federal Awards 49,600,762$ 1,613,882$ 51,214,644$

105


NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


Note 1. Fund Types

The District utilizes the fund types specified in the Texas Education Agency Resource Guide.

Special Revenue Fund – used to account for resources restricted to, or designated for, specific

purposes by a grantor. Federal and state awards generally are accounted for in a Special Revenue

Fund. Generally, unused balances are returned to the grantor at the close of specified grant periods.

Note 2. Accounting and Financial Reporting

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus.

The Governmental Funds are accounted for using a current financial resources measurement focus. All

federal grant funds were accounted for in the Special Revenue Fund, which are Governmental Funds. With

this measurement focus, only current assets and current liabilities generally are included on the balance sheet.

Operating statements of these funds present increases (i.e., revenues and other financing sources) and

decreases (i.e., expenditures and other financing uses) in net current assets.

The Schedule of Expenditures of Federal Awards was prepared on the modified accrual basis of accounting.

The modified accrual basis of accounting is used for the Governmental Funds. This basis of accounting

recognizes revenues in the accounting period in which they become susceptible to accrual, i.e., both

measurable and available, and expenditures in the accounting period in which the fund liability is incurred, if

measurable, except for unmatured interest on long-term debt, which is recognized when due, and certain

compensated absences and claims and judgments, which are recognized when the obligations are expected to

be liquidated with expendable available financial resources.

Federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the

grant, and, accordingly, when such funds are received, they are recorded as deferred revenues until earned.

The District has not elected to use the 10 percent de-minimis indirect cost rate.

Note 3. Period of Availability

The period of availability for federal grant funds for the purpose of liquidation of outstanding obligations

made on or before the ending date of the federal project period extends 30 days beyond the federal project

period ending date, in accordance with provisions in Section H: Period of Availability of Federal Funds, Part

3, OMB Circular A-133 Compliance Supplement.

Note 4. Contingent Liabilities

The District participates in numerous state and federal grant programs, which are governed by various rules

and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit

and adjustments by the grantor agencies; therefore, to the extent that the District has not complied with rules

and regulations governing the grants, refund of any money received may be required and the collectability of

any related receivable at August 31, 2016, may be impaired. In the opinion of the District, there are no

significant contingent liabilities relating to compliance with the rules and regulations governing the respective

grants; therefore, no provision has been recorded in the accompanying financial statements for such

contingencies.

Note 5. Reconciliation to the Basic Financial Statements

The following is a reconciliation of expenditures of federal awards program per the Schedule of Expenditures

of Federal Awards and federal revenues reported on Exhibit C-2 of the District’s Comprehensive Annual

Financial Report:

Total Expenditures of Federal Awards 51,214,644$

School Health and Related Services (SHARS) 4,717,271

Qualified School Construction Bonds Interest Subsidy 466,488

Federal Revenues Reported on Exhibit C-2 56,398,403$

106

GARLAND INDEPENDENT SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS For the Year Ended August 31, 2016

107

I. Summary of Auditors’ Results

Financial Statements

Type of auditors’ report issued: Unmodified

Internal control over financial reporting:

Material weakness (es) identified? No

Significant deficiency(ies) identified that are not considered to be material weaknesses? Yes; Finding #2016-001

Noncompliance material to financial statements noted? No

Federal Awards Internal control over major programs:

Material weakness(es) identified? No Significant deficiency(ies) identified that are not considered to be material weaknesses? None reported

Type of auditors’ report issued on compliance with major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with section 2 CFR 200.516(a) of the Uniform Guidance?

No

Identification of major programs:

Name of Federal Program or Cluster CFDA Numbers

Special Education Cluster (IDEA): IDEA – Part B, Formula IDEA – Part B, Preschool

ESEA Title III, Part A, LEP

ESEA Title II, Part A, Teacher & Principal Training

84.027A 84.173A

84.365A

84.367A

Dollar Threshold Considered Between Type A and Type B Federal Programs $1,536,439

Auditee qualified as low-risk auditee? Yes

GARLAND INDEPENDENT SCHOOL DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (continued) For the Year Ended August 31, 2016

108

II. Financial Statement Findings

Finding # 2016-001 – Supporting Documentation for Attendance Changes

Criteria: Per sections 2.3.5 and 3.6.3 of the Texas Education Agency’s Student Attendance Accounting Handbook (SAAH), school districts must maintain proper documentation when changing a student’s attendance record from “Absent” to “Present” for Foundation School Program (FSP) funding purposes.

Condition: During fiscal year 2016, we requested an attendance change report for one regular attendance day and selected a total of 25 attendance changes that moved a student to a funded category. Our sample covered a total of five campuses. One campus was unable to provide supporting documentation for two (2) changes made to a funded category, while another campus was unable to support the attendance change to a funded category for four (4) students.

Cause: One campus had turnover at the attendance clerk level and supporting documentation was not found after several attempts were made by the district to locate the documentation. For another campus, documentation was not found by the campus personnel.

Effect: The District is not in compliance with the Texas Education Agency’s SAAH’s documentation requirements and the lack of documentation could negatively affect the District’s FSP funding levels.

Recommendation: The District should ensure that all attendance changes are properly documented, maintained by the campuses, and is readily available for audit purposes.

III. Federal Awards Findings and Questioned Costs

No current year findings noted.

IV. Summary Schedule of Prior Audit Findings

No prior year findings.

V. Corrective Action

Response: The Student Services Department will implement procedures for documenting all funded attendance codes entered in Skyward. In addition the attendance administrator team will continue to provide training to Attendance Clerks, Data Clerks, and Campus Administrators responsible for attendance. The team will participate in the District’s annual records management training to ensure all campus personnel can understand proper attendance documentation and storage. The attendance administrator team will implement an audit of attendance records for all campuses.

Responsible Party: Executive Director of Student Services.

Estimated Completion: August 31, 2017.

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